101 / 204
2013 Best
Practices Study
Agencies
with Revenues
Between
$5,000,000 and
$10,000,000
101
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
For Best Practices firms both bullish and bearish on
life after healthcare reform, developing a deep and
wide suite of voluntary benefits products and services
was cited as a growth strategy. Finally, a large
number of Best Practices firms see the development
of fee-for-service models as significant to their ability
to generate revenue in the healthcare arena in the
future.
Facing Challenges
Health care reform, growth and people – these three
issues remain the issues most on the minds of Best
Practices agencies. Although a mediocre economic
recovery continues to confound many firms, these
three issues were, by a wide margin, the most-
frequently cited challenges facing this group of Best
Practices agencies.
As has been well documented, the independent
insurance agency world is not one dominated
by young people. This continues to create many
challenges, but one challenge seems to be on the
forefront of many Best Practices agencies today –
finding enough talented young people to backfill
for the coming retirement of significant numbers of
senior insurance agency employees.
For many years, the insurance companies themselves
were seen as fertile recruiting territories for
experienced and well-trained insurance professionals.
Today, in light of insurance company consolidation
and centralization (and the accompanying loss of
abundant regional offices), this is no longer the case.
Further, in light of today’s ubiquitous restrictive
agreement realities, in which key employees,
particularly producers and account executives,
are effectively “locked-up,” competing agencies
offer limited personnel “poaching” opportunities.
Increasingly, insurance agents are forced to “grow
their own” talent. For agencies unable to develop an
efficient way to train and develop “green” insurance
employees, the future is unclear.
Other commonly cited challenges included satisfying
insurance company appetites for new business,
keeping up with technology and developing the next
generation of leadership. Interestingly, long-time
readers of the Best Practices Study will recognize how
many (most) of the challenges faced in the industry
remain the same, year after year.
“This business is amazingly resilient. Sure we have problems…we always do. Obamacare
is the big one for us right now. But a little perspective is helpful. Before Obamacare, it was
the banks, or Eliot Spitzer, or the Internet. We got through all that just fine.”
Top Challenges
(Top 5 Listed in Order of Frequency Mentioned
)
1. Internal perpetuation
2. Finding enough sales talent
3. Finding good support people
4. Organic growth
5. Health Care Reform - how to respond and
prosper in the future
Top Adjustments
(Top 5 Listed in Order of Frequency Mentioned)
1. Focusing on larger accounts (>50 lives) and
voluntary products
2. Eliminating or reducing sales
commissions for small health insurance
accounts written
3. Working to better understand and work
with and through state exchanges
4. Developing fee-based compensation
models
5. Developing best-in-class intellectual capital
around how best to navigate and respond
to Health Care Reform