124 / 191
2010 Best
Practices Study
Agencies
with Revenues
Between
$10,000,000 and
$25,000,000
124
Analysis of Agencies with Revenues Between $10,000,000 and $25,000,000
Mgmt. Perspectives
Profile
Revenues
Expenses
Profitability
Employee Overview
Producer Info
Staff Service Info
Technology
Insurance Carriers
Appendix
Adjusting to Health Care Reform
The passage of “Obamacare” has resulted in
unprecedented teeth-gnashing in the insurance
industry as carriers, providers and brokers have all been
working feverishly to understand and plan for an
uncertain future.
We asked the BPS brokers between $10 - $25 million
how are they adjusting to what has already been
passed. After all, as a group, employee benefits
revenue represents over 20% of their total revenue.
Interestingly, this group is not panicking. In fact, most
say they are not making immediate changes to their
operation, but instead are monitoring the legislation.
Facing Challenges
The combination of a weak economy and soft
insurance market are the two biggest challenges
frustrating leaders of agencies of all types and sizes.
BPS agency leaders tend to be a naturally optimistic
group – pressing forward and investing in the future,
regardless of the market.
Many are expressing concerns about an aging
workforce. As one principal stated “Our ability to
remain independent long term will be predicated on
our ability to attract, develop and retain young,
successful producer talent.” BPS agencies are working
hard to ensure they are well-positioned to face
whatever challenges the market brings, and to prosper
in the future.
Top Challenges
(Top 5 Listed in Order of Frequency Mentioned
)
1. Hiring talented people, especially producers
2. Succession and perpetuation – planning for
the transition of their firm’s leadership and
ownership to the next generation
3. Finding ways to grow organically, despite the
headwinds of the marketplace
4. Maintaining profitability when organic
growth is slow but expenses continue to rise
5. Maintaining employee morale during an era
of stagnant wages and economic uncertainty
Top Adjustments
(Top 5 Listed in Order of Frequency Mentioned)
1. Become positioned as the client’s “go-to”
information resource for healthcare reform,
via whitepapers, seminars, videos, Twitter, etc.
2. Expand more aggressively into selling
voluntary products
3. Move upstream to write larger group cases,
focusing on those over 50 lives
4. Proactively change the method of broker
compensation from commissions to fees
5. Become trusted advisor to clients by offering
consultative value added resources such as
wellness, actuarial, etc. to lower healthcare
costs
“One of the challenges we face as an agency is determining where and how to
allocate our talent and carrier resources to achieve the greatest impact and
success for our partners and employees.”