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Analysis of Agencies with Revenues
Between $1,250,000 and $2,500,000
C
OMMUNICATIONS
–
“It’s amazing the impact a quick ‘thank-you’
e-mail to an underwriter or employee who’s
gone out of their way to help you can have,
especially if you carbon-copy their immediate
supervisor.”
“We have strict rules regarding our use of
voice mail. It is not there for our employees to
use it to screen their calls. We are in business
to answer our phones. If we don’t, someone
else will.”
“Everyone in the agency meets early for
breakfast every Monday morning for an
hour to get all our issues on the table before
the phone starts ringing. Overall it is the
most productive time any of us spend all
week.”
E
MPLOYEE
, C
LIENT
,
AND
C
ARRIER
Best Practices
agencies continue to work hard to ensure effective
communications both internally and externally. They continuously
evaluate the most effective methods of achieving it. Although email
and voice-mail, when used correctly, are wonderful tools to connect
agents, insurance companies, and consumers, improper use of
these technologies can create additional work or cause
considerable frustration when face-to-face communications would
be simpler.
Our
Best Practices
agencies work hard to ensure that face-to-face
communications are available when needed (both internally and
with carriers & customers) and that technological solutions are used
extensively when appropriate. A number of
Best Practices
agencies
we interviewed indicated that, in this day of electronic connectivity,
weekly agency or department-wide staff meetings are more
important than ever.
F
INANCIAL
M
ANAGEMENT
“We have an expected pretax profit margin
each year and we manage expenses to
ensure we get there. ”
“Our producers have 90 days to collect on
an account. After that, it’s passed on to
our collections person and the producer is
never paid their commissions, regardless of
whether we eventually collect on it.
Producers are paid only on those accounts
that are collected inside three months.”
“We started compensating new business
producers differently than our account
sitters. It’s okay if you have a few account
sitters - I guess that’s inevitable and they
have their place, but you sure better pay
them differently than you pay the guys
who are shouldering the new business
load.”
For agencies in this revenue size group, a significant financial
orientation begins to emerge among
Best Practices
agencies. Few
agencies are able to grow to this size and sophistication without a
careful eye on the bottom line and the financial resources necessary
to grow.
In addition, the increased number of owners generally associated
with these larger agencies requires a more broad-based orientation
towards managing the agency “investment” for the benefit of many.
A common list of financial management issues emerge with
Best
Practices
agencies of this size: establishing appropriate
compensation levels, aggressive collection practices, avoiding
investments in non-operating assets, cash flow management,
overnight investment vehicles, and operational budgeting.
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