2004 Best Practices Study

REVENUE SIZE CATEGORY HERE AGENCIES WITH REVENUES BETWE $2,500,000 AND $5,000,000

EXECUTIVE PERSPECTIVES

EXECUTIVE PERSPECTIVES

Keys to Their Success As with the other revenue categories, a primary success factor mentioned by the agency princi- pals is the quality of their staff. They indicated that they strive to attract and keep the top caliber

PROFILE

people available. One principal summed this up well: "Our agency works hard to locate, recruit, train and retain ethical, motivated people to work in our agency." Another frequently mentioned factor is the quality of their companies, where they maintain relationships with carriers that are financially stable and that offer a line of products that serve their customers' needs. A third factor is a focus on the production of profitable business that can be retained with the high quality of service that the agencies offer. This was evident in the fact that for the top three agencies in this size category, their ten largest accounts represent about 10% of the agencies net rev- enues, with the single largest account representing from $56,000 to $137,000 of revenue. One agency mentioned that niche markets help to increase the agency's efficien- cy by allowing them to do concentrated work with a spe- cific carrier rather than having to market new and renew- al business. Challenges They Face

Factors Most Critical to Agency's Success (Top 5 Listed in Order of Frequency Mentioned) 1. Top caliber employees in both sales and service areas 2. Good array of stable carriers to meet clients' product needs 3. Solid relationships with quality clients that value service 4. Focus on new business development, especially in niche or target markets 5. Having appropriate technology to maximize agency's effectiveness

REVENUES/ EXPENSES

FINANCIAL STABILITY

EMPLOYEE OVERVIEW

PRODUCER INFO

The greatest challenge faced by this group is in the area of sales - finding quality producers and developing and maintaining a sales culture. As one principal stated, "It's a challenge to hire qual- ity producers. Many want to be employed, but only a few will commit to put forth the effort

SERVICE STAFF INFO

required to be a successful producer." Almost half of the "new" producer hires came from within other insur- ance brokers, and about 15% came from insurance car- riers. This means that the industry may not be success- fully attracting as much new talent from other industries or from new entrants into the workplace. Also, technol- ogy continues to present a challenge to all agencies, including this revenue group. Although the cost of technology has decreased, it continues to be a challenge for agencies to capitalize on the efficiencies represent- ed by effective utilization of their automation systems. The features are there, but they must be integrated into the agency procedures and then used by agency person- nel! Within this group, almost 94% of the agencies use one of the three most prevalent systems: Applied (66%), AfW (22%), and Sagitta (6%).

Top Challenges (Top 5 Listed in Order of Frequency Mentioned) 1. Acquiring/developing new producers to successfully grow and/or perpetuate the agency 2. Finding/training quality service personnel 3. Maintaining carriers relationships that meet agency needs / meeting volume commitments 4. Staying current with technology and maximizing its use 5. Achieving/managing growth with out compromising existing client satisfaction

TECHNOLOGY

INSURANCE CARRIERS

APPENDIX

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