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Mgmt. Perspectives
Profile
Revenues
Expenses
Profitability
Employee Overview
Producer Info
Staff Service Info
Technology
Insurance Carriers
Appendix
2010 Best
Practices Study
Agencies
with Revenues
Between
$5,000,000 and
$10,000,000
93
Analysis of Agencies with Revenues Between $5,000,000 and $10,000,000
Recruiting & Developing Talent
Many agents have grown weary of attempting to
recruit production talent from competitors. Producer
non-compete agreements are now the rule, rather than
the exception, making it increasingly difficult to recruit
producers with existing books of business. In response
to the old adage,“it’s easier to teach a good salesperson
insurance than it is to teach a good insurance person to
sell,” many Best Practices agencies are increasingly
recruiting successful sales talent from other industries.
This emphasis on recruiting sales talent without
specific insurance experience is significantly increasing
the need to develop a well defined training and
development program. Although most agencies still
rely heavily on insurance company schools, many are
developing inside “universities” and curricula to
supplement these outside resources for both producer
and support personnel hires. Given the enormity of the
investment necessary to facilitate this employee
development, agents are placing more or more
emphasis on the careful screening and testing of
candidates to increase the likelihood of success.
Although outside recruiters and Internet employment
sites are frequently used to identify new employee
candidates, many agencies find that their existing
employees are the best source of producer and support
personnel candidates. Many agencies provide
significant referral bonuses to employees for
identifying candidates that are ultimately hired.
Achieving Organic Growth
Current economic conditions and the soft P&C
marketplace are making significant organic growth
increasingly difficult to achieve. The average agency in
this $5 - $10 M group grew organically by only 0.3% last
year. Cross-selling initiatives were a frequently cited
practice leading to positive growth and most find it far
easier to sell an existing customer than to find a new
one. Agencies are increasingly making use of cross-sell
commission arrangements to spur this activity among
producers.
Best Practices agencies also report better success with
a more specialized approach and a greater emphasis
on niche business. A specialized practice focus
(contractors, professional liability, biomedical, etc.)
generally results in far better new business results and
much higher profitability than a general lines
approach. Accordingly, marketing and advertising
efforts for these specialty practices are much more
focused and effective. Recruiting producers and
support personnel from these target niches make it
more likely that the agency “speaks the industry’s
specific language” and understands the specific needs
of the customer base being targeted.
Finally, a more methodical and “businesslike” new
business pipeline approach is frequently cited as a key
to successful new business efforts. Pipeline software is
increasingly used to ensure that producers are
accountable for prospecting the right business in
sufficient volumes and that target business is not
“falling through the cracks” or being mismanaged.
Adjusting to Health Care Reform
When asked about their strategic responses to
healthcare reform, many Best practices agencies
indicated that they are taking a “wait and see”
approach. The uncertainly of how the healthcare
reform legislation will ultimately be implemented
makes it difficult to take definitive action. Many in this
year’s study are optimistic that they will be able to
adapt and that their group heath books of business will
not be negatively impacted once the dust settles. Most
Keys to Recruiting/Developing Talent
(Top 5 Listed in Order of Frequency Mentioned)
1. Recruiting experienced sales talent from
outside the industry
2. Screening / testing producer candidate much
more carefully
3. More emphasis on in-house training
4. Hiring referrals from existing employees
5. Increased use of recruiters & Internet
employment sites
Keys to Organic Growth
(Top 5 Listed in Order of Frequency Mentioned)
1. Cross-selling initiatives
2. Niche / specialty focus
3. Increasing new business producer incentives
4. Target marketing & advertising
5. Managing producer pipelines more carefully