2007 Best Practices Study

Agencies with Revenues Under $1,250,000

Executive Perspectives

Profile

Revenues/ Expenses

Financial Stability

Employee Overview

Producer Info

Service Staff Info

Technology

Insurance Carriers

Appendix

in other parts of the country, however, are living with soft market pricing which makes organic revenue growth even more difficult. In spite of the continuous struggle to acquire and retain markets, less than 30% of these agencies want to merge or sell to a third party. Most want to remain independent and perpetuate internally. Realistically, they acknowledge an uphill battle in finding and developing new employees that can facilitate this dream. With an average of 5.7 employees who must “do it all”, this group of agencies relies on technology to maximize productivity. 98% of the agencies utilize carrier interface, both interactive and download, to support their service and processing activities. Nearly 75% utilize scanning and document management to streamline workflows. The use of dual monitors at service workstations also supports a near paperless environment. “We touch a piece of paper once… period!” is a commonly expressed sentiment. Maximizing Productivity

Top Challenges (Top 5 Listed in Order of Frequency Mentioned) 1. Maintaining carrier relationships / meeting premium volume commitments

2. Surviving current market conditions

3. Finding and developing new staff, particularly new producers

4. Funding and fully utilizing available technology

5. Having time to do it all

Nevertheless, the agencies are remarkably effective at keeping an array of markets to meet their clients’ needs. They are constantly looking for carriers willing to work with small town agencies, finding ways to show that the agency and its employees has something different to offer, whether it is a specialized designation unique to a particular industry or a business plan for growth. Many have “clustered” with other small agencies to consolidate a portion of their business volume, thus giving them access to more carriers, especially top-notch regionals. While the agencies operating in larger communities typically have better access to markets, they are constantly reviewing their carriers to make sure each market continues to be a competitive and viable source for the agencies’ clients. As one top-performer said, “They (carriers) want more business so we are always making sure we have a good fit for the business we write. Retention goes hand in hand with increased business.” The market challenges don’t end with limited access. Surviving current market conditions has been hard for this group. Coastal agencies, while enjoying some benefit of hard market rates, are struggling against their carriers’ low appetites for property exposure and their clients’ needs for affordable insurance. Agencies

Keys to Maximizing Productivity

(Top 5 Listed in Order of Frequency Mentioned) 1. Heavy utilization of available technology

2. Focus on total account

development and referral business

3. Effective incentives and rewards for results 4. Ongoing employee training and education

5. Effective communications

2 2007 Best Practices Study | Agencies with Revenues Under $1,250,000 | Executive Perspectives