how a swot analysis can help you refocus

a complimentary whitepaper for insurance professionals

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How a SWOT analysis can

help you refocus

Time to refresh your strategic planningAs insurance agents and underwriters contemplate the future, they face more uncertainty than ever. Technology continues to transform every aspect of the insurance business. Turmoil in Washington has everyone wondering where everything from regulatory oversight to taxes to interest rates will stand in a year.

It’s easy to be paralyzed by uncertainty, but doing nothing only increases the chances your agency will suffer as a result of changes. An environment like the present is an ideal time to revisit your agency’s strategic plan (or develop one, if you’ve never had a plan) so you can better prepare for what lies ahead.

One of the most practical approaches for business planning is the time-proven tool known as the SWOT analysis. This simple but surprisingly insightful technique, which has been around for the past half-century, provides an excellent way to assess what you’re doing well, where you need to improve, and also to create a framework that will help you respond to whatever shakes out of the current uncertainty. Performing a SWOT analysis forces you to examine your business and your environment in new ways and from new directions. 1

Four factorsSWOT is an acronym for the four factors detailed in the analysis: strengths, weaknesses, opportunities, and threats. While business plans often swell to book-length

documents, the most useful SWOT analyses are quick summaries, often using bullet points rather than full sentences and paragraphs. That doesn’t mean they’re insubstantial or meaningless – actually, just the opposite. By using fewer words, a SWOT analysis sharpens the impact and focus.

Strengths. What are considered to be strengths are the internal attributes of your company that make a positive contribution to the business. For example, one strength is the knowledge and experience you and your team bring to client needs. Another is your existing book of business and the fact that most of your income is ongoing, resulting from commissions on renewals from that book of business. 2

Weaknesses. Many people view weaknesses as faults or places for blame, but within the context of a SWOT analysis, they represent the internal areas in which it’s most important for an agency to improve so that it can be more competitive. If an agency is to thrive, efforts must be made to turn those weaknesses into future strengths.3 As an example, for many agencies, one major weakness can be a non-competitive product or service. To transform that weakness into a strength, the agency should focus on ways to improve its products and services to be better able to compete.4

Opportunities. These are external situations that have the potential to increase your business and contribute to your success. While these situations – which may include

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market and economic trends, political and economic policies and more – are beyond your agency’s control, you may be able to capitalize upon them. As part of a SWOT analysis, you can identify both shorter-term opportunities to pursue right away and longer-term opportunities that require advance planning and additional steps such as increasing staffing or arranging for training.

Threats. The final category is another word for risks to your agency that are outside of your control. Threats may include everything from new competition, to negative regulatory actions, to changes in consumer tastes. You may not be able to prevent threats from happening, but a SWOT analysis can call attention to both known and potential issues allowing you to develop contingency plans so that you are better prepared to deal with the situation.5

Have your team do the hard workAs an agency owner, you could easily develop your own SWOT analysis. But there’s value to be gained by turning the task over to your team. Frankly, the only valuable SWOT analysis is one that’s brutally honest, and who better than your team to tell you what is working and what’s falling short. They likely think about these things every day, and probably even grumble among themselves. Giving your team a formal means to express their thoughts not only empowers them, but it also begins to develop them as your next generation of leaders.

While it’s likely you have strong opinions about what your agency is doing well and where it needs help, keep in mind that your viewpoint is affected by your position, your history, and even your ego. A team-driven SWOT analysis will give you a better sense of the company by combining a broad variety of viewpoints and perspectives. You may think that your technology is first-rate, only to discover that your employees crave an upgrade to something better. You may not need to include every employee, but make sure all aspects of your agency are included. 6

There is another important benefit to including your employees in this process: it gives them a reason to buy into your business strategy. They have had a voice in assessing the company and identifying goals, so they are more likely to take ownership of and responsibility for those goals. They are also better able to take a wider view, seeing how the work they perform each day contributes to the company’s overall viability and growth, and, as a result, may become a more cohesive and collaborative group.

How to make it happenThere are two important steps when starting the SWOT analysis process. Your team must know that you genuinely want candid input and that you are going to empower them to manage the process. Second, you’ll need to explain the basics of a SWOT analysis, so they clearly understand the expectations. It may be beneficial to engage an outside facilitator who can explain the process and guide the team through the steps. Employees may be more comfortable asking tough questions and clarifying instructions when they are not talking to the boss.

Whitepaper: How a SWOT analysis can help you refocus

Performing a SWOT analysis forces you to examine your business and your environment in new ways and from new directions.


It’s critical that you step back and avoid trying to influence the process. Resist the urge to check on your team’s progress, or to ask them how things are going. If asked to intervene in a dispute, gracefully inform them that you trust their ability to achieve a resolution and step out of the room.

Developing an effective SWOT AnalysisOne effective way to develop the four parts of a SWOT analysis is by asking questions focused on each area.

Strengths. Ask questions that provide insight into the assets your agency has that will help it grow and succeed, such as:

• What do you do better than competitors?

• What specialized experience or knowledge do you have?

• Which lines of business are most profitable?

• How would satisfied customers describe you to others?

• Why would someone choose to do business with you?

Weaknesses. Questions that probe for factors that could hurt your progress include:

• What internally has caused you to lose business in the last couple years?

• Which lines of business are less profitable?

• Does everyone on your team have the training they need?

• What resources does your agency lack?

• Where are the inefficiencies within your operations?

Opportunities. Areas that can help you see ways to grow or improve your agency include:

• How can you increase business among current clients?

• What would improved technology allow you to accomplish?

• What external circumstances could lead to growth?

• Are there new types of clients or new geographic areas you can pursue?

• Do you have local competitors who might consider being acquired or merged?

Threats: To get a sense of the external factors that might interfere with your objectives, ask questions such as:

• What do your toughest competitors do better?

• Is the average age of your client base too old?

• Are you missing out on specific groups of clients?

• Are there economic issues affecting your community?

• Can you compete with carriers who sell directly to clients? 7



Putting your analysis to workRegular use of SWOT analyses can provide powerful tools to guide your planning process and identify areas where improvement or additional resources are needed as well as where your agency may already have opportunities for impact and growth.

However, developing a SWOT analysis is only the first step. Once you’ve identified those strengths, weaknesses, opportunities, and threats, you need to create a strategic plan for implementing what you’ve learned and how you will go about achieving your objectives. For example, you may want to set goals to help you capitalize on each of the opportunities. You might also look at each of the weaknesses and determine the best way to shore things up. You may even be able to pursue strategies that simultaneously address weaknesses and threats by pursuing specific opportunities. The key is to use the insight you’ve gained to guide you as to how to keep your agency moving forward. 8 Keep in mind that your strategic plan is a living document. So if the business environment shifts in any way, you can revisit and refresh your analysis. This way, no matter what happens in the economy or the outside world, you’ll be more confident in your ability and capacity to respond efficiently and effectively.

Financing your plans for improvementIf you’ve identified promising opportunities for improvement or growth but lack the financial resources to implement them from your working capital, it may be worthwhile to consider outside funding. There are multiple choices, each with pros and cons.

For example, agency owners often turn to their local banker for help, only to discover that traditional banks may not be comfortable with the financial structure of insurance agencies. Most are geared to making loans to businesses that have tangible assets such as inventory, equipment, and real estate. Another option is loans that are guaranteed by the Small Business Administration, but SBA loans typically take a long time to process, may involve an overwhelming amount of paperwork, and have relatively small lending limits – not to mention, a lien on your home.

A growing number of agency owners are turning to a specialty lender, like Oak Street Funding®, that is accustomed to working with the unique assets of the insurance industry. Such lenders understand how an agency like yours operates, and are familiar with the nature of your revenue streams, so they can approach the underwriting with realistic expectations and an appreciation for inherent risks.


Once you’ve identified your strengths, weaknesses, opportunities, and threats, you need to create a strategic plan for implementing what you’ve learned and how you will go about achieving your objectives.


Working with Oak Street FundingWith a loan from Oak Street Funding, you can borrow against the future cash flows from your book of business. It’s a solution thousands of agency owners have used to finance strategies for growth and competitiveness.

Oak Street can customize a loan for your needs and situation, from $25,000 to $30 million, with a term of ten to 12 years. The goal is to help you finance growth with minimal out-of-pocket cost by leveraging the power of your firm’s cash flow. Learn more or request a free quote at www.oakstreetfunding.com or 1-866-OAK FUND.

The strategic opportunities available to insurance agencies are limitless. Access to affordable capital is the key to taking advantage of those opportunities, and Oak Street Funding has money to lend.

About Oak Street FundingThe materials in this paper are for informational purposes only. They are not offered as and do not constitute an offer for a loan, professional or legal advice or legal opinion and should not be used as a substitute for obtaining professional or legal advice. The use of this paper, including sending an email, voice mail or any other communication to Oak Street, does not create a relationship of any kind between you and Oak Street.

Loans and lines of credit subject to approval. Potential borrowers are responsible for their own due diligence on acquisitions. CA residents: Loans made pursuant to a California Department of Business Oversight Finance Lenders License (#6039829).

Footnotes1 Parsons, Noah, “What Is a SWOT Analysis, and How to Do It Right,” liveplan.com, April 5, 2018.

2 “Insurance Agency SWOT Analysis,” thefinanceresource.com, undated.

3 Hill, Brian, “Why Perform a SWOT Analysis?” chron.com, March 12, 2019.

4 thefinanceresource.com, op. cit.

5 Hill, op. cit.

6 Parsons, op. cit.

7 Gregory, Alyssa, “How to Conduct a SWOT Analysis for Your Small Business,” thebalancesmb.com, May 9, 2019.

8 ibid.


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