2000 Best Practices Study

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The 2000 Best Practices Study Executive Update
Background
In 1993, the Independent Insurance Agents of America (IIAA) and Reagan Consulting published the first
Best Practices Study, an analysis of the leading insurance agencies in the United States. The Study was
conducted to provide the agency community with a set of operational benchmarks and business practices by
which agencies of any size could contrast, evaluate, and enhance their performance. Each year, critical
financial and operational benchmarks are updated and released to the industry. Every third year, a more
comprehensive analysis is performed to update all benchmarks and to identify current business practices.
The next comprehensive study will be conducted and released in 2001. It will provide an analysis of
agency results for the year 2000.
About this study
This year’s Best Practices Study results are being published and distributed primarily via the IIAA
and Reagan Consulting websites. Users can
view an html version of the study, download a pdf file to print locally, or download an Excel spreadsheet to
compare their year-end results with the study results. Through IIAA’s Best Practices gateway, the user can
also access the complete family of Best Practices resources.
The content and format of the study have been designed to provide an “Executive Summary” feel. Tables
and charts are used to present the data, making it easier to compare results and to find related information.
Some of the interesting, but non-critical data (e.g. type of agency management system used, types of
services provided, etc.) found in earlier studies have been eliminated from the Executive Update. This
information will be collected and presented again in the comprehensive Best Practices Study released in
2001.
As in previous years, the update provides an analysis of agencies by revenue size, by region and by
population density of the city in which they primarily operate. In addition, the study contains an analysis of
agencies that indicated that Personal Lines is an important source of revenue.
How the study was conducted
The 2000 Best Practices Executive Update continues to follow the year-end results of those agencies
selected for inclusion in the 1998 Best Practices Study Update. These agencies were among approximately
700 agencies originally nominated to participate in the 1998 study either by one of the insurance companies
participating on the IIAA Commission to Enhance Agency Values or by a state association. Of those
submitting data for that study, only the results of the 30 most outstanding agencies in each revenue
category were included. They were scored and ranked objectively for inclusion on the basis of:
• Account Retention Rates
• Revenue Growth
• Productivity
• Profitability
• Financial Stability
This year 81% of the 1998 Best Practices Agencies submitted the operating results of their most recently
completed fiscal year. The most frequent reason given by those not participating in this year’s update was
that they had been acquired by or merged with another agency.