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Analysis of Agencies with Revenues
Less Than $500,000
C
ARRIER
R
ELATIONSHIPS
“We pride ourselves on the thorough job
we do with our submissions. We make
sure all of our apps are complete and
correct and have all the information the
carrier is going to need. Our carriers
keep telling us how unusual we are.”
“Our companies trust us because we
don’t try to pull any wool over their
eyes or slip anything past them. In our
small community we sometimes have to
quote on something that we know is not
that great for the company even though
it looks good on paper. We just make
sure the insurance company knows all
the facts so they can respond
appropriately. They have learned to
trust us, so when we tell the company
‘this is a good piece of business’, they
take our word for it.”
“Our best relationships are with carriers
that support us in trying to be the best
we can be whether it is providing us
with dollars for co-op advertising or to
develop a website or just giving us
advice when we ask for it.”
Like most small agencies, retaining their markets and
satisfying volume requirement is seen as a challenge, one
that requires constant attention. Nevertheless, the most
successful agencies in this revenue category have a very
simple game plan for establishing and maintaining carrier
relationships:
(1) put forth a sincere, consistent effort to represent
the carriers fairly and honestly;
(2) do your very best to produce the kind of business
the carrier wants; and
(3) make it easy for the carrier to do business with
you.
To execute this plan they do a lot of front-end underwriting,
placing only business that the carrier wants or making sure
the carrier is aware of all the facts and has the opportunity to
respond appropriately to the risk. Effort is put into submitting
only complete, correct, well-organized applications that
include diagrams, pictures, claims histories, or other
information that is needed for the carrier to quickly and
properly underwrite and process the policy. When the carrier
offers new services or products, they try to accommodate and
utilize them if possible.
In addition to playing by these rules, these agencies try to
establish personal relationships with carrier contacts. They
work at scheduling periodic face-to-face time either in the
agency or at the carrier to discuss what they can do together
and how, and to address issues that need to be addressed.
They also seek to serve on the carriers’ advisory boards. On
the other hand, these agencies are not afraid to walk away
from a carrier relationship if it is hurting the agency/client
relationship.
P
ERPETUATION
/L
EADERSHIP
D
EVELOPMENT
Many of the agencies interviewed for this study named
perpetuation and leadership development as one of their
three greatest weaknesses. Of those that had addressed the
issue, various approaches emerged. Although many of the
younger principals, especially those located in more urban
areas, felt there was still time to address the issue in the
future, they had instinctively begun to think in terms of
growing their business and its value for a future merger or
acquisition. Many of the more rural agencies felt an affiliation
with another agency or one of the agency networks such as
“I am helping my son gain confidence to
make the tough decisions by throwing
things back to him and asking him how
he thinks it should be handled. When he
sees that the decision he would make is
the same decision I would make or is
better, it gives him confidence.”
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