2007 Best Practices Study

Agencies with Revenues Over $25,000,000

Executive Perspectives

Profile

Revenues/ Expenses

Financial Stability

Employee Overview

Producer Info

Service Staff Info

Technology

Insurance Carriers

Appendix

Keys to Achieving a Competitive Advantage

Maximizing Productivity

(Top 5 Listed in Order of Frequency Mentioned) 1. We employ the best and brightest in our market 2. Use of in-house value added resources 3. Breadth and depth of carrier relationships

As in prior years, participants noted use of information technology as their most significant method of maximizing productivity. Interestingly, several noted document imaging as one of the most important elements of their IT strategy, so the long-stated goal of going paperless is finally being achieved by several of these firms. The second most common response was new and encouraging. These firms noted they are actively using Best Practices benchmarks to measure and improve their operations. They are getting significant traction in improving the performance of their agencies by comparing themselves with the industry’s top performers. Gaining a Competitive Edge

4. Employee ownership

5. Industry specialization

Because the agency business is first and foremost a people business, the top performers consistently point out that their people are their most important asset and their only sustainable source of competitive advantage. They note that a strategy of hiring the best and brightest employees, even at a significantly higher cost, ultimately pays enormous dividends. One top performer commented “We hire the best people and pay them very well. We find they can do a lot more work than less expensive folks and normally with better attitudes.” Another common response – and this points to a major trend among this largest group – relate to the development and use of in-house value added resources. These resources, such as pre-loss and post- loss consulting, are expensive to build in-house, but are increasingly becoming an expected part of the customer service requirements for mid-size and large commercial accounts. There is a race going on among mid-size and large insurance agents to build high quality in-house resources.

Keys to Maximizing Productivity (Top 5 Listed in Order of Frequency Mentioned) 1. Use of imaging and other information technology

2. Use of Best Practices as a benchmarking tool

3. Hiring the best and brightest

employees and paying them above market

4. Significant investments in employee training

5. Compensate employees for productivity

147 2007 Best Practices Study | Agencies with Revenues Over $25,000,000 | Executive Perspectives