2013 Best Practices Study

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

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 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

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,

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

2013 Best Practices Study

Agencies with Revenues Between $1,250,000 and $2,500,000

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