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2007 Best Practices Study | Agencies with Revenues Under $1,250,000 | Executive Perspectives
Appendix
Insurance
Carriers
Technology
Service
Staff Info
Producer
Info
Employee
Overview
Financial
Stability
Revenues/
Expenses
Executive
Perspectives
Profile
Agencies with Revenues Under $1,250,000
Revenue per Employee (total net revenues divided by
number of employees) and Spread per Employee
(revenues per employee minus compensation per
employee) are important productivity measures. The
average Revenue per Employee in this group is
$130,529 with a Spread of $61,945. These results,
which increased nearly 10% over last year’s results,
have been achieved through a focus on total account
development (cross selling, account rounding, and
upgrading) and obtaining referral business, both of
which have lower new business acquisition costs.
To support this focus, a significant number of the
agencies pay additional incentives and/or bonus
compensation to their licensed employees. “Everyone
has received a bonus every month for the past two
years,” noted one agent. “The program has been very
successful in motivating our staff to write new
business.”
Ongoing employee training and education is another
key to productivity, but this is often accomplished
through regular staff meetings where employees share
ideas and information. One agent who uses weekly
meetings to educate producers and discuss marketing
efforts explains, “Each producer covers all accounts
they are working on each week. The collective group
discusses each prospect and how to best cover the risk
exposed, market to carrier, place the business and
present to prospect. This helps to place accountability
with each producer and encourages learning and
participation by the entire group. The group dynamic
is a positive for all.” It is also an example of the
effective communications that many in this group point
to as another key to their productivity.
Gaining a Competitive Edge
“Our staff! They get it.” “Our lean and qualified staff.”
“Top quality employees!” “Fantastic staff.” The
agencies in this group cannot praise their employees
enough and quickly identify their staffs’ technical
competence, expertise, integrity and work ethic as the
key to their competitive advantage. Because of the
depth of insurance knowledge and specialized
understanding of their markets and of clients’ needs,
especially in niche markets, these agencies are
frequently identified as problem solvers.
The fact that independent agents partner with a variety
of companies and can offer products and services that
can best fit the clients’ needs provides a competitive
edge, especially in rural America where Allstate, State
Farm, Nationwide and other captives are strong
competitors. These agencies work hard to maintain
strong carrier relationships through careful
underwriting and aggressively marketing to prospects
that meet the company’s appetite.
Like most independent agents they are very involved in
their communities. They enjoy strong name
recognition and good reputations because of the
service they provide. While they all provide the
standards—annually review coverages, send out
recommendation letters with every renewal, call back
clients on the same day, remarket when needed, are
available on evenings and weekends, etc.—the
following quote sums up how these Best Practices
Agencies regard their role in their communities and the
service they provide… “Our agency has a competitive
advantage because of our customer advocacy following
a devastating hurricane which destroyed our
community. We worked diligently with both our
Keys to Achieving a
Competitive Advantage
(Top 5 Listed in Order of Frequency Mentioned)
1. The technical competence and
expertise of top-quality employees
2. Good relationships with carriers that
offer competitive products
3. Niche markets / program business /
target marketing
4. Superior service / customer
advocacy
5. Strong name recognition and
reputation in the community