100 / 204
2013 Best
Practices Study
Agencies
with Revenues
Between
$5,000,000 and
$10,000,000
100
Analysis of Agencies with Revenues Between $5,000,000 and $10,000,000
Key Benchmarks
Mgmt. Perspectives
Profile
Revenues
Expenses
Profitability
Employee Overview
Producer Info
Service Staff Info
Technology
Insurance Carriers
Appendix
Developing New Producers
Perhaps no single issue consumes as much time and
energy for growth-oriented agents & brokers as the
question of how to recruit and develop producer
talent.
Given the relative scarcity of good new sales talent
and the high cost of recruiting, these Best Practices
firms are becoming much more methodical in terms
of developing new recruits to ensure that their
investments are likely to pay off. A large number of
the firms have very specific and regimented training
& development tracks that involve both inside and
outside sales and insurance training resources,
depending on the specific needs of the producers in
development. These resources, when coupled with an
effective mentoring relationship with an experienced
producer, were frequently cited as the means that
were most instrumental in significantly increasing
producer development success rates.
Other frequently-cited producer development
practices included maintaining strict accountability
with young producers on expected activities. A
real help in this has been an increased level of
accountability and follow-up with company insurance
schools after on-site training is completed. Several of
these schools now have as a part of their programs a
significant amount of interaction with their graduates
after the fact to ensure that the lessons learned are
being applied.
Finally, focusing producers early on in a limited
number of product or industry niches (as opposed
to developing, primarily, as a generalist producer)
continues to be a common practices leading to
producer development success.
Adjusting to Health Care Reform
The Patient Protection and Affordable Care Act
(PPACA) passed in 2010, includes many provisions
that will take effect between now and 2020. This
legislation continues to prove to be a real challenge
for Best Practices agencies to navigate, as a great
deal of uncertainty remains as to how it will be fully
implemented.
Many agencies see the PPACA as a significant threat
to their employee benefits practices (especially
accounts serving under 50 employees), while others
see it as a huge opportunity. And, of course, many
agents and brokers fall somewhere in between –
hopeful for the future but unclear on how it will
ultimately affect them.
For agents with small benefits practice groups, the
primary “survival strategy” cited was to focus on
finding ways to work effectively with state insurance
exchanges to retain commission or fee income for
clients who access these exchanges for their coverage.
For other agencies who view healthcare reform as
a huge opportunity, many seek to develop their
benefits practices as true experts in navigating and
responding to the PPACA as a significant means
by which they can differentiate themselves from
smaller, less sophisticated competitors. Best Practices
agencies that are betting on the future of the
healthcare business see the development of deep
intellectual capital as a significant leg up in coming
out on top.
Keys to Developing New Producers
(Top 5 Listed in Order of Frequency Mentioned)
1. Recruit proven sales talent from outside
the industry
2. Active mentoring relationships with
seasoned producers
3. Significant and consistent investments
in sales methodology and insurance
training for inexperienced sales recruits
4. Allocating a fixed percentage of revenue
towards producer development year-in /
year-out
5. Strict accountability from the very
beginning
“We do much better when we
hire producers in classes of two
or three. It allows us to really
leverage our internal training
resources (which have been
expensive to develop) and it
gives these young people a
shared sense of mission and
builds camaraderie. “