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11

2007 Best Practices Study | Agencies with Revenues Under $1,250,000 | Revenues/Expenses

Agencies with Revenues Under $1,250,000

Appendix

Insurance

Carriers

Technology

Service

Staff Info

Producer

Info

Employee

Overview

Financial

Stability

Revenues/

Expenses

Executive

Perspectives

Profile

Revenue Growth by Source

(continued)

*Insufficient Data

Average +25% Profit +25% Growth

Value Added Services - L&H

Renewals

*

*

*

New Business

*

*

*

Acquired Revenues

*

*

*

Organic Growth

*

*

*

Total Growth

*

*

*

Total Commissions & Fees

Renewals

93.0% 92.4% 103.0%

New Business

14.0% 17.9% 16.2%

Acquired Revenues

2.0%

0.0%

7.9%

Organic Growth

7.3%

10.2% 19.3%

Total Growth

9.2%

10.2% 27.2%

P&C Contingent Income Growth

16.6% 54.3% 26.5%

L&H Bonus Income Growth

*

*

*

Investment Income Growth

16.3%

*

*

Total Revenue Growth

8.1%

11.6% 23.0%

Brokerage Commission Expense Growth

*

*

*

Net Revenue Growth (Organic)**

9.2%

12.0% 24.6%

Net Revenue Growth (Total)

10.9% 12.0% 32.1%

Future Revenue Growth Strategies

% of Total Responses

Study participants were asked

to indicate their three most

important strategies for

enhancing or achieving future

revenue growth.

1

2

3

Access to Better Carriers

0.0% 8.6% 5.7%

Advertising/Promotions

5.7% 2.9% 14.3%

Agency/Book of Business Acquisitions

0.0% 5.7% 20.0%

Cross-Selling/Total Account Development

28.6% 14.3% 14.3%

Producer Recruitment/Development

14.3% 11.4% 11.4%

New Business Initiatives—Prog Dev/Niche Marketing

11.4% 11.4% 5.7%

New Business Initiatives—Referrals/Centers of Influence 34.3% 22.9% 17.1%

New Business Initiatives—Strategic Alliances

5.7% 17.1% 11.4%

Other*

0.0% 5.7% 0.0%

With:

1

—Critically Important

2

—Very Important

3

—Important

*Includes website marketing/sales, expanded geographic footprint, higher retention, creating a captive, better support/CSR training &

recruiting, value added services

**Organic growth rates

for the most recently

completed fiscal year

varied widely by region

due in part to the effect

of Hurricane Katrina on

coastal exposure pricing.

As a result, the AVERAGE

organic growth rates

achieved by the Best

Practices Agencies were

skewed upward. As

such, readers of this

study might prefer to

benchmark off of the

MEDIAN organic growth

rate, which is the mid-

point of the data when

the results are ranked in

descending order.

MEDIAN

Organic Growth Rate:

6.0%