2001 Best Practices Study

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

R EVENUE G ROWTH

“We sold off a lot of commodity business five years ago and we went through a very painful process to develop some programs and target some niches to focus on. We used to compete with everyone in the insurance business. Now we find we can much better control our growth and fortunes. It’s so much easier to sell insurance when you’re an expert in a niche.” “We like the program business because it allows us to work around the fact that we can’t find many good pure producers. To the extent that you can develop products that meet a very specific need, you can minimize your dependence on individual producers…a good account executive will do.” “We have a producer (in a different city) working on a laptop out of his home … we could effectively do this all over the state…it really is possible to run a virtual agency if the technology and procedures are set up right … of course, you really have to have the right type of producer for this to work.” “We really feel like product specific web sites hold tremendous promise for us. So instead of going to www.XYZ- Insurance.com, a buyer would be directed to something like www.golf-course- insurance.com where he’ll find exactly the information he’s looking for… no need for him to wade through pages of information he could care less about.”

When it comes to revenue growth, the current hardening market has done much to benefit an industry that has struggled to grow for so long. Unfortunately, a hardened P&C market can cover the fact that an agency is not growing and diminish interest in addressing fundamental growth challenges. However, Best Practices agencies continue to execute strategies that have allowed them to succeed even in a historically challenged growth environment: aggressive cross-selling of accounts, prudent acquisitions of agencies and books of business, developing niche and program business, the careful development and management of producers, accountability against a sales budget, and the development an organization-wide sales culture.

T ECHNOLOGY U TILIZATION

Perhaps no other area of agency management creates as much angst and uncertainty as technology management. It is difficult to move forward in an environment in which the “right” direction is so uncertain. Agencies are trying to address the whole technology picture – the agency management system, the telephone systems, voice mail, contact management, scanning, imaging, broadband, faxing, email as well as the integration of all these pieces. Best Practices agencies don’t necessarily have all the answers, but increasingly agencies of this size are able to deal more effectively with the issues at hand. Many Best Practices agencies we interviewed have at least one full-time technology employee on board, which is rare for smaller agencies. In addition, many Best Practices agencies have interactive websites, agency-wide high speed Internet access, and dial-in capabilities, allowing for remote access by off-site employees.

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