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EXECUTIVE PERSPECTIVES
A New BP Size Category
In past years, the largest BP size category included all firms over $10 million in revenue. For this
year's study, a new category was established for firms over $25 million in revenue. Therefore,
there is now a new category for firms between $10 and $25 million in revenue.
Of the 30 firms that were selected for this new category, the average revenue is $14.6 million.
With an average of 98 employees, these firms generate revenue per employee of just under
$155,000. In terms of ownership, two are bank-owned, with the balance of the firms independ-
ently owned.
Keys to Their Success
The principals of these firms were asked to identify the
keys to their success. Two responses dwarfed all others: 1)
the ability to attract and retain talent - especially producers
and 2) the ability to create and maintain a sales culture.
Responding to key issue #1, this year's study included a set
of questions relating to new producer hires. A key finding:
the average firm hired 2.7 producers last year, which repre-
sented 13.3% of their total producer base. For 2004, they
planned on hiring another 2.8. The average wage paid to a
new producer was $64,875.
Where did these new producers come from? The majority (55.1%) came from a competing insur-
ance broker, while roughly 1 out of 5 came from a carrier. Only about 1 in 10 came from outside
of the insurance industry - a sign that the industry's effort to improve its "market-share" of talent
is having only limited success.
On a more positive note, these firms are making strides in developing and maintaining a sales cul-
ture, with average new commissions of $96,692 per commercial p&c producer and $117,619 per
employee benefits producer.
Challenges They Face
Without a doubt, the number one challenge for these firms
is building their talent base - both of sales and support
people. For most, the desire to do so is strong, but they
lack the ability to find and then attract top talent.
The second greatest challenge mentioned by the partici-
pants is finding ways to continue to grow revenues in the
face of a host of challenging factors, including carrier con-
REVENUE SIZE CATEGORY HERE
EXECUTIVE
PERSPECTIVES
PROFILE
REVENUES/
EXPENSES
FINANCIAL
STABILITY
EMPLOYEE
OVERVIEW
PRODUCER
INFO
SERVICE
STAFF
INFO
TECHNOLOGY
INSURANCE
CARRIERS
APPENDIX
127
AGENCIES WITH REVENUES BETWE N $10,000,000 ND $25,000,000
Factors Most Critical to
Agency's Success
(Top 5 Listed in Order of Frequency Mentioned)
1. Ability to find, recruit
and retain talented staff
2. A focus on revenue
growth / new business
3. Superior customer
service / strong
relationships
4. Carrier relationships /
good markets
5. Effective use of
technology
Top Challenges
(Top 5 Listed in Order of Frequency Mentioned)
1. Finding and recruiting
talented staff
2. Finding new, young
producers
3. Changing market conditions /
decreased commissions
4. Loss of markets
5. Ongoing training of new and
experienced personnel