2001 Best Practices Study

Analysis of Agencies with Revenues Between $1,250,000 and $2,500,000

C ARRIER R ELATIONSHIPS

“We take the key contacts at each of our lead carriers to the lake with us for a long weekend each year and essentially tell them, ‘we want you to know how much you mean to the success of our business.’ You wouldn’t believe how much they appreciate that and how hard these people work for us from that point on. I have other agencies calling me up asking me exactly what we’re doing at these parties!” “We assign specific individuals throughout the organization the responsibility of keeping relationships with our key markets on-track … no one person can effectively do that job.” “It becomes so much harder to do business with the carriers that aren’t moving forward with their systems and procedures. At some point, if a policy takes 50% more time to write with one of our preferred companies versus an aggressive “newbie,” we’re going to move the business. We’re finding that we need to reassess our key markets much more frequently than we expected to.” “Most agents want to complain about what the companies do wrong without ever asking what our role in the relationship looks like. Very few agencies, as business partners to the carriers, could stand up to the scrutiny we apply to them. When you back up and realize that these are people just like we are trying to do their best with what they’ve got, it takes on a different feel. We need each other and we need to work from that point forward.”

The Best Practices with regard to carrier and vendor relationships continue to center around the careful selection and support of a select number of key business partners. However, many of the same frustrations that have characterized the agent-carrier relationship continue to be voiced by Best Practices agencies: frequent changes in business strategies and appetites on the part of carriers, increased pressure on agents for more and more volume, and a growing gap between insurance carriers that ‘get it’ technically and procedurally and those that do not. As one agent stated, “We felt (and still feel) that we had the right carriers for the 90’s. We have serious doubts that this same group is going to work for us in the new millennium.” The Best Practices of agencies with positive agency-carrier relationships tend to center around maintaining open and honest communication; frequent personal interaction; a mutual, sincere and sustained commitment; joint planning efforts; and simply writing profitable business.

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