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2013 Best
Practices Study
Agencies
with Revenues
Between
$1,250,000 and
$2,500,000
37
Analysis of Agencies with Revenues Between $1,250,000 and $2,500,000
Key Benchmarks
Mgmt. Perspectives
Profile
Revenues
Expenses
Profitability
Employee Overview
Producer Info
Service Staff Info
Technology
Insurance Carriers
Appendix
In the middle of the spectrum are those agents that are
just trying to stay abreast of the situation and understand
the changes so they can be prepared for the impacts
while serving their clients. They are also attempting to
sell more ancillary products (dental, vision, LTD, etc.) and
want to be prepared to participate in the exchanges if “it
is really an option.”
Facing Challenges
The biggest challenge for this group, by a material
margin, is the recruiting, training and retaining of talent.
Although the topic has been covered ad nauseam in the
industry for years, it is a growing issue with regard to both
production and service talent. The industry’s seasoned
veterans are leaving in record numbers without a pool
of young insurance-trained talent waiting to take over.
Ultimately new business production and agency growth
is at stake and the dearth of new talent is seen as the
biggest threat to continued independence.
While competition tends to make everyone better, most
agents in this group feel competition has increased on
two fronts. Direct writers and direct response carriers are
trying to commoditize the insurance market. The larger
independent agencies are expanding their footprints
into areas that previously were served by agencies in
this revenue category. These large agencies are able
to provide services to clients that the smaller agencies
simply do not have.
In the face of this competition, agency principals are
attempting to operate their agency as efficiently as
possible to ensure their long-term prosperity. However,
one of the best tools to help reduce cost and facilitate the
ease of doing business also presents one of the biggest
challenges. Many of the agencies find it difficult to stay
current with the ever changing technology offerings and
their implementation and effective utilization in order
to reduce cost and improve efficiency. The problem is
compounded by the inability to find new employees who
have both insurance skills and technology skills.
Also on the technology front is the issues surrounding
social media, “which is going to be a key input to our
success in the future.”
Top Challenges
(Top 5 Listed in Order of Frequency Mentioned
)
1. Recruiting, Training and Retaining Talent
2. Competition from Larger Agencies
3. Controlling Costs
4. New Business Production
5. Technology
Top Adjustments
(Top 5 Listed in Order of Frequency Mentioned)
1. Nothing
2. Focusing on Becoming a Trusted Advisor
to Clients
3. Investing and Expanding
4. Focusing on Supplemental Products
5. TreadingWater