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2007 Best Practices Study | Agencies with Revenues Over $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 Over $25,000,000
The principals of these firms were asked to identify the
keys to their success. As in the past, the clear
consensus is that recruiting talented people –
producers and non-producers – is clearly the most
important success factor. This year’s study surfaced
something new among the top performers. They now
mention employee development, and specifically the
development of leaders, as a critical issue. One
agency principal who was distinguishing between
management and leadership shared the insight that
“running an agency and growing an agency are two
different things.” He was pointing out that it takes a
leader to grow an agency.
More and more agencies also seem to be focusing on
the importance of developing a people-friendly culture
that attracts the industry’s best and brightest talent.
Agencies that have learned how to sell clients on value
rather than simply price are learning how to develop a
value proposition for employees that does not simply
rely on paying employees the highest wages in their
market.
Challenges They Face
The challenge of growing revenues in an extended
soft market is clearly the greatest challenge faced by
the Best Practices Agencies. Especially in the hard-hit
Midwest and Northeast regions, organic growth has
been especially difficult to achieve. The Southeast,
Southwest and coastal areas have fared much better
during the past couple of years.
Several firms noted that finding quality employees
from within the industry is getting tougher and
tougher, which is necessitating a move to recruit from
outside the industry. With that said, nearly 80% of
producers hired by this largest group during the past
year came from either another broker or an insurance
carrier. Collectively, this group hired approximately
200 new producers last year, and roughly 135 of
these “switched teams” from one agency to another.
A frequently noted concern is the possibility of
national health care legislation. As this group has
been investing heavily in developing group health
insurance business in recent years, the loss of a
significant portion of this revenue would be extremely
damaging. As a result, this group is keeping a close
eye on U.S. political trends.
Factors Most Critical to
Agency’s Success
(Top 5 Listed in Order of Frequency Mentioned)
1. Recruiting of talented employees at
all levels
2. Development of employees and
leaders
3. Develop a winning, performance-
oriented culture
4. Opportunity for ownership used to
attract talent
5. Increasing/sustaining organic growth
Top Challenges
(Top 5 Listed in Order of Frequency Mentioned)
1. Growing in a soft market
2. Finding quality sales and support
employees
3. Concerns about national healthcare
4. Competing with public companies
for acquisitions
5. Maintaining our culture as we
expand geographically