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2007 Best Practices Study | Agencies with Revenues Between $10,000,000 and $25,000,000 | Executive Perspectives
Appendix
Insurance
Carriers
Technology
Service
Staff Info
Producer
Info
Employee
Overview
Financial
Stability
Revenues/
Expenses
Executive
Perspectives
Profile
Agencies with Revenues Between $10,000,000 and $25,000,000
Maximizing Productivity
Perhaps the best measure of productivity for an
insurance agency remains the revenue-per-employee
metric. In this year’s study, the average agency
generated $180,451 in revenue-per-employee. In the
2004
Best Practices Study
, comparably-sized firms in
generated $154,848 in revenue-per-employee – this
year’s results reflect an improvement of 16.5% in only
short three years. It is interesting to note that material
improvements in productivity are still being made
today, even after years and years of steady investment
in technology, training and procedures
standardization.
Another excellent measure of productivity is
commission serviced per CSR. The top commercial
P&C CSRs in this group of agencies were able to
manage books averaging $620,000 in commission
income. Group Life & Health and Personal P&C CSRs
in this
Best Practices
group were able to manage
books averaging $352,000 and $175,000 in
commissions, respectively.
The average agency in this revenue group invested
1.9% of net revenue in information technology
(systems, software and training). They have also
reached the size where they need full-time IT
managers and spend just under 1.0% of their net
revenues on IT personnel compensation.
Gaining a Competitive Edge
Organic growth for agencies in this group totaled
17.0%, a clear indication that this group of agents is
highly
competitive in the marketplace. These results,
good in
any
environment, are especially noteworthy in
light of the current soft P&C market. Not surprisingly,
key to remaining competitive include a relentlessly
focus on service excellence, retaining employees, niche
marketing and adding value for the customer at every
step.
In an environment in which many agents & brokers
offer essentially identical “product” at identical pricing,
remaining distinctive becomes increasingly
challenging. One agent’s challenge, however, is
another agent’s opportunity - as one agent puts it, “If
you can’t distinguish yourself in this marketplace,
you’re in the wrong business. A little innovation in
our drab industry goes a long way. Once you’ve got
a prospect asking himself why his agent isn’t thinking
outside the box like you are, ‘game over.’ People are
dying for creative thinking and solutions to their risk
exposures.”
Keys to Maximizing
Productivity
(Top 5 Listed in Order of Frequency Mentioned)
1. Measure / monitor / adjust every
aspect of business
2. Doing things the right way the first
time
3. Thorough and non-negotiable
systems and procedures
4. Ongoing investments in automation
and training
5. Eliminating unprofitable account
relationships
Keys to Achieving a
Competitive Advantage
(Top 5 Listed in Order of Frequency Mentioned)
1. Low employee turnover
2. Focusing new business efforts on
strategic opportunities
3. Developing niche business
expertise
4. A relentless commitment to service
5. Seeking to add value in every
client encounter