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Analysis of Agencies with Revenues
Less Than $500,000
“Over the years we have written some
large accounts when the market was
hard, so when we made the money we put
it aside. We didn’t spend that money
but invested it wisely. We have been able
to weather several rocky periods without
borrowing money ... and, we finance
everything in house. Not having any
interest expense helps considerably.”
At the same time, most successful smaller agencies do not
use their size as an excuse for not successfully managing
their finances. The typical agency in this study group is good
at managing its receivables, keeping sufficient trust balances
and investing properly the cash they have. More often than
not, the principals of these insurance agencies prepare
budgets in order to respond to the cyclical nature of the flow
of their business, to prepare for capital expenditures and to
measure their performance.
R
EVENUE
G
ROWTH
Strategies for growing revenues in this study group run the
gamut. Several have specialized in targeted niches and
gained endorsements from associations or other trade groups
while others have gravitated to offering their clients complete
solutions – property & casualty, life & health and financial
services. The top agencies in this study group appear to
have fairly strong sales cultures with a focus on either
developing strategic alliances or on account development and
cross selling (although many see this focus as providing
better service to the client.) Production goals and
commission income are monitored very closely. Referrals are
actively solicited and local advertising and community
involvement are used to build a good stream of business.
“We do not live or die on selling just
P&C. We also sell L&H, pension
plans, mutual funds. With 92% of
our accounts we have at least two
lines of business or more. When we
sell the client life insurance we know
that, if for some reason we lose the
P&C, we will retain the account
because they are not likely to change
their life insurance. We almost
always get the P&C back.”
“We stress account selling pretty
heavily and continuously. If we are
out at a farm in June selling hail
insurance, we can usually get them
to look at their risks and usually end
up selling something else.”
“Gaining the endorsement of the
restaurant association has allowed me
to market statewide where the calls
roll in daily. What a great way to do
business!”
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