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Analysis of Agencies with Revenues
Between $500,000 and $1,250,000
F
INANCIAL
M
ANAGEMENT
“We are from the old school. We are not
afraid to send out a cancellation notice if
the payment is late.”
“Everybody in the agency knows what it
takes to make a profit because we
continuously talk about how much we
spend of each dollar of commission for
staffing, overhead, automation, office
expenses ... so when it comes time to spend
money on a ‘great idea’, we all know there
are going to have to be some trade-offs.”
The key financial management practice to surface with this group of
agencies was invoicing agency-billed transactions on a timely basis.
This was done to expedite collection of the premium in order to
increase the agency’s float and interest income, as well as to
minimize the internal cost of collecting past-due balances.
Most had a procedure in place to binder-bill transactions as soon as
the estimated premium is determined.
R
EVENUE
G
ROWTH
Revenue growth is one of the challenges that causes this group of
agencies the most concern. They actively solicit referrals, have
established strategic alliances with a wide range of entities, have
turned to the internet to sell specialized niched products, and in
many cases have expanded their products and services beyond
insurance in order to add new revenues.
“Just a year ago we got into a joint venture
with a credit union that is paying some
real dividends. I just think the opportunity
for independent agencies to align
themselves with a variety of people is
incredible. And I don’t mean sell out, I
mean align.”
“We keep our producers so focused it drives
them nuts. We have ongoing sales
training so that everyone has the same
focus on the sales process.”
Another common strategy is to cross-sell life, health, disability, long-
term care and retirement planning products to round out their P&C
accounts.
Surprisingly none of the agencies in this group turned to merger or
acquisition activity as a way to accomplish growth.
T
ECHNOLOGY
U
TILIZATION
“We got rid of the data line between the two
offices and replaced it with a virtual private
network that someone else runs. Now we
just go out to the internet.”
“We have started to store digital pictures. It
really helps when we market to a company
to be able to email a color digital picture so
they can see the property first-hand.”
Technology is a critical success factor for most of these agencies.
They make extensive use of their agency management systems to
extract data for client servicing, communications, and marketing.
Many have installed scanners to supplement data entry and have
integrated fax capabilities into each workstation.
Most employees have desktop access to the internet and email is
used extensively, both internally and externally.
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