![Show Menu](styles/mobile-menu.png)
![Page Background](./../common/page-substrates/page0041.png)
32
2007 Best Practices Study | Agencies with Revenues Between $1,250,000 and $2,500,000 | Executive Perspectives
Appendix
Insurance
Carriers
Technology
Service
Staff Info
Producer
Info
Employee
Overview
Financial
Stability
Revenues/
Expenses
Executive
Perspectives
Profile
Agencies with Revenues Between $1,250,000 and $2,500,000
management systems – fewer and fewer providers are
used by agents. Over 90% of Best Practices agencies
in this revenue group use either Applied or AMS
agency management systems. The average agency
continues to leverage technology heavily in order to
ensure maximized productivity – 80% scan and
manage documents electronically and 93.3% have
dedicated websites. The average Best Practices agency
dedicates 1.3% of net revenue to IT expenditures
(hardware/software, leasing, maintenance, data lines,
ISPs, outside consultants, etc.).
Another key trend contributing to increased
productivity continues to be transitioning from agency
to direct bill – 68.6% of P&C revenue is now collected
at the company level for the average Best Practices
agency in this group. Interestingly, only 3.4% of
agencies in this Best Practices group use service centers
for commercial P&C accounts – none use them for
personal P&C business.
Gaining a Competitive Edge
Not surprisingly, people are identified as the most
common competitive advantage. A culture oriented
towards internal perpetuation was also frequently cited
as a competitive advantage – particularly in recruiting
talented producers. One agency owner said it this
way: “Let’s face it … this is an entrepreneurial business
that attracts salespeople who want some skin in the
game. The best in this business don’t want to be ‘just
another producer’ for a public broker hoping for the
occasional stock option. The fact that we can offer
stock to the high-performing producers who are
growing our agency is a real advantage to us in
becoming the ‘employer of choice’ in our
community.” Almost 60% of agencies in this group
intend to perpetuate their business internally.
Active involvement in the community was also
identified as a key competitive advantage. “People
like to do business with people also doing business
locally,” one agency owner said. “The fact that we’re
sponsoring your son’s little league team and sitting
across from you at the Rotary meeting – that counts
for something around here. At the end of the day,
insurance is all about personal relationships and we
never forget that.”
Carrier representation was also viewed as a key
competitive advantage by agencies in this group. The
average agency represents 3.7 and 5.3 national and
regional personal P&C carriers, respectively. For
commercial P&C business, the average agency
represents 5.7 and 9.5 national and regional carriers,
respectively. Total revenue from the top P&C carrier
averaged 24.0%.
Keys to Maximizing
Productivity
(Top 5 Listed in Order of Frequency Mentioned)
1. Maximizing technology usage
2. Writing profitable business
3. Education / training
4. Standardization of procedures
5. Quality of employees
Keys to Achieving a
Competitive Advantage
(Top 5 Listed in Order of Frequency Mentioned)
1. The quality of our employees
2. Community presence
3. Carriers
4. Internal perpetuation
5. Service to customer