2001 Best Practices Study

Analysis of Agencies with Revenues Greater Than $10,000,000

development of procedures and processes are not only closely integrated, but are frequently one and the same. Agency automation systems frequently dictate or greatly influence the procedures and processes that are utilized. Unfortunately, this can result in a procedure that makes a lot of sense to the IT people, but makes no sense to the customer or to the producers and support staff. For this reason, it is very important that the IT people incorporate a high level of sensitivity to the needs of the customer and to the productivity and efficiency of the producers and support staff. These firms universally recognize that procedures and processes need to be clearly and thoughtfully defined and put in writing. Employees need to be trained on these procedures and held accountable for utilizing them. By doing so, it is recognized that customers will be better served, productivity will be increased, the likelihood of an error or omission will be decreased, and a much more enjoyable environment within which to work will be created (i.e., everyone will know what everyone else is doing procedurally). These agents and brokers recognize that one of the greatest competitive advantages they can have is the quality of the carriers that they represent and the strength of their relationships with them. Obviously, the best way to strengthen those relationships is to provide a growing volume of profitable business of sufficient size. In addition to this, though, these agents and brokers recognize that it is important to understand the objectives of their carriers and to align their own objectives with those carriers. Relationships are strengthened with good communications at all levels, from the senior management of the insurance companies to the front-line underwriters. They also recognize that the strength of the relationship will also be in direct proportion to the level of trust that exists with their insurance companies. With the necessity to find ways to operate more efficiently, the way in which carriers and agents and brokers are doing business is also getting more attention. One of the most positive statements is that there is a lot of room for improvement. In order to find ways to improve the efficiency, some of these agents and brokers are making decisions as to whom they are going to align with based on the efficiency with which their carriers do business. This will also be directly impacted by how carriers embrace and utilize technology. Recognizing that a lot of business flows through the path of least resistance, it is becoming more apparent that those carriers that effectively embrace technology to the benefit of their customer (the agents and brokers and the insureds) will give themselves a material competitive advantage. This is certainly something that many leading agents and brokers are looking at when considering who they want to do business with in the future. C ARRIER R ELATIONSHIPS

“Technology is greatly influencing the processes and procedures that we use. It does allow for better efficiency. We just have to make certain that we are more efficiently accomplishing our overall objectives.” “We feel that we are doing as well as anyone else with the processes and procedures that we use, but we know that there is still a lot of room for improvement.”

“We are working diligently to manage the relationship with our carriers, to not only ensure their commitment to us in the future, but also to ensure that we’re doing the job for them as well.” “Aligning ourselves strategically with our carriers can be a challenge as a result of frequently changing focus with many carriers, but it is still something that we are committed to do with our key markets.” “It is still a people business. We invest a lot in the relationships we have with our insurance carrier partners and do everything possible to build their trust in us and a commitment to us.”

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