165 / 204
2013 Best
Practices Study
Agencies
with
Revenues
Over
$25,000,000
165
Analysis of Agencies with Revenues Over $25,000,000
Key Benchmarks
Mgmt. Perspectives
Profile
Revenues
Expenses
Profitability
Employee Overview
Producer Info
Service Staff Info
Technology
Insurance Carriers
Appendix
Facing Challenges
A couple of key themes run throughout the most
frequently mentioned challenges. The most critical
and most common is the impending retirement of key
producers, managers, leaders and agency owners. This
is clearly a reality and a big problem for many firms.
It will necessitate effectively (and for many rapidly)
attracting and developing producers and developing
the next generation of managers and leaders.
As indicated above, healthcare reform is a big
challenge as well (see what Best Practices agencies
are doing to respond). It is on the top of the list of
challenges for many firms.
The ability to maintain growth and profitability, the
two most important metrics driving agency value,
are both mentioned as top challenges. Also listed
as challenges were several strategies that, while
challenging to implement or achieve, can improve the
ability to grow and be more profitable. These include
developing practice groups and niches, improving
technology capabilities and improving operating
efficiencies.
Finally, the Best Practices agencies also recognized
as a challenge, but also a need, the ability to
effective develop and communicate the firm’s
value proposition. Those things that give a firm its
competitive advantage must be effectively developed
and communicated as the firm’s brand. It should
be described as the summary of the reasons that a
customer would want to do business with the agency
(or an employee would want to work for the agency).
Many of these Best Practices agencies have not only
developed capabilities that set them apart, but they
have also trained their staff to be able to effectively
and consistently communicate, sell and deliver those
capabilities. Others have found that it is not easily
done.
“There is still a lot of uncertainty but we cannot allow that to paralyze
us – we are taking the steps we need to prepare us for what is likely and
are keeping abreast of the changes as they occur and are staying ready to
adapt.”
Top Challenges
(Top 5 Listed in Order of Frequency Mentioned
)
1. Attracting and developing producers
2. Healthcare reform
3. Transitioning retiring producers and
leaders
4. Maintaining good organic growth
5. Maintaining good profit margins
(especially in Employee Benefits)
Top Adjustments
(Top 5 Listed in Order of Frequency Mentioned)
1. Developing or considering a private
exchange
2. Investing in compliance capabilities
3. Focusing on writing larger groups
4. Using a more consultative sales approach
5. Hiring more staff to meet demands