2010 Best Practices Study

Analysis of Agencies with Revenues Between $10,000,000 and $25,000,000

Mgmt. Perspectives

Recruiting & Developing Talent When asked about the most important driver of their success, Best Practices agencies consistently point to the talent of their employees. If they recruit the best people, and then develop them to their fullest potential, success becomes nearly inevitable. Methods of recruiting and developing talent vary widely. Each agency must develop its own strategy based on a combination of factors including the community in which it operates, the type of business it writes and the demographics of its existing employees. “Luckily we realized that we wanted to strengthen our sales culture several years before the downturn in the economy. Moving from a service to a sales culture is a slow and difficult process. We now have regular sales meetings, work within sales teams, and we’ve formalized producers’ sales and production plans and are holding them accountable for results. All of this has helped us navigate the difficult economy and soft market.” A clear trend in this year’s study is that a heavy percentage of firms are striving to “get younger” now that the baby-boom generation is starting to retire. While the compensation requirements of younger employees tend to fall below those of more established employees, most of the“savings”must then be invested in education and development. The good news: firms in this size category frequently have the advantage of being large enough to make the infrastructure investments necessary to enable employees new to the industry succeed.

Profile

Keys to Recruiting/Developing Talent (Top 5 Listed in Order of Frequency Mentioned)

Revenues

1. Set recruiting as a key long-term strategy.

Expenses

Achieving Organic Growth With the soft economy and soft P&C marketplace in recent years, organic growth has become extremely difficult to achieve, even for Best Practices agencies. Since the Study was first introduced in 1993, there has never been a single year in which organic growth was below 5%. Contrast this with the past two years, when organic growth was 1.0% and 1.6%, respectively. BPS agencies are responding aggressively, however, making investments that should pay off regardless of when, and how much, the marketplace improves. 2. Maintain a pipeline of talented candidates at all times, frequently by tapping into employees’ relationship networks. 3. Screen candidates diligently with a combination of outside testing and multiple interviews. 4. Create a customized development path for each new employee. 5. Hire youth, but be prepared to make heavy investments in equipping and mentoring Keys to Organic Growth (Top 5 Listed in Order of Frequency Mentioned) 1. Industry specialization 2. Enhanced producer accountability for achieving sales goals 3. Investments in new producers 4. Focusing on harvesting the low-hanging fruit by account rounding and interdepartmental cross-selling 5. Investments in sales training and producer development

Profitability

Employee Overview

Producer Info

Staff Service Info

Technology

Insurance Carriers

Appendix

2010 Best Practices Study

Agencies with Revenues Between $10,000,000 and $25,000,000

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