152 / 186
EXECUTIVE PERSPECTIVES
The Newest BP Size Category
In order to recognize and evaluate the operating practices of some of the largest and most success-
ful agents and brokers in the country, the Best Practices Study has created a new size category for
agencies with revenues in excess of $25 million. Because of the limited universe from which
these agencies are selected, there are only 15 agencies included in this size category, as compared
to the 30 included in the other six size categories. Of the 15 that were nominated and, in turn,
selected, two are bank-owned with the remaining 13 being privately held. These 15 firms are gen-
erating average revenues of just over $48 million, have an average of 270 employees and are gen-
erating average revenues per employee of just under $160,000. On average, this group of firms
saw their total commissions and fees grow by 11.8% in 2003, and saw their pre-tax profits grow
by close to 30%. This is truly an outstanding group of agents and brokers.
Keys to Their Success
The principals of these firms were asked to identify the
most critical keys to their success. The most frequent
response was clearly the quality of their people, with a close
second being their ability to create a sales culture. The third
most frequent response was their ability to effectively serve
their clients. Evidence of the ability of these organizations
to attract talented people, particularly producers, and to cre-
ate a sales culture is evidenced by the fact that the average
commercial lines producer, in these agencies, generated an
average of $112,898 in new commissions and serviced a
total book of business of just under $695,000. At the same
time, the average employee benefits producer generated
new commissions of $116,408, and handled an average
book of business of just under $500,000.
Challenges They Face
When asked to identify the most significant challenges that
they will face, the most prevalent response was the ability to
grow their revenues in soft market conditions. Secondly,
these executives saw producer recruitment as a huge chal-
lenge, and also felt like it would be difficult to deal with car-
rier relations in light of all of the consolidations going on. It
is interesting to see that of the new producers recruited by
these firms, 53% came from another broker, 19% from
insurance carriers, 14% from outside the industry and
13.8% were hired directly out of college. On average, these
firms hired 6.3 new producers during the year, at an average
starting salary of just over $87,000.
REVENUE SIZE CATEGORY HERE
EXECUTIVE
PERSPECTIVES
PROFILE
REVENUES/
EXPENSES
FINANCIAL
STABILITY
EMPLOYEE
OVERVIEW
PRODUCER
INFO
SERVICE
STAFF
INFO
TECHNOLOGY
INSURANCE
CARRIERS
APPENDIX
151
AGENCIES WITH REV NUES OVER $25,000,000
Factors Most Critical to
Agency's Success
(Top 5 Listed in Order of Frequency Mentioned)
1. Acquiring and keeping quality
people
2. New business development/
organic growth
3. Acquiring and retaining
successful producers
4. Diligently serving our clients
5. Balancing growth and
profitability
Top Challenges
(Top 5 Listed in Order of Frequency Mentioned)
1. Growing revenues and
maintaining profitability in a
soft market
2. Producer recruitment and
development
3. Carrier consolidations and
market changes.
4. Agency perpetuation
5. Identifying new business/
growth opportunities