2007 Best Practices Study

Agencies with Revenues Between $5,000,000 and $10,000,000

Executive Perspectives

Profile

Revenues/ Expenses

Financial Stability

Employee Overview

Producer Info

Service Staff Info

Technology

Insurance Carriers

Appendix

Top Challenges (Top 5 Listed in Order of Frequency Mentioned) 1. Finding and retaining good employees

Keys to Their Success

Clearly, for agencies in this revenue category, the most common answer to the question of “What factors are most critical to an agency’s success?” would be their people. The ability to attract, retain and motivate quality producers, support staff and managers is key to their success, but it is becoming more difficult due to the shortage of trained, quality talent within our industry. This has created the necessity for many to begin hiring talented sales people and service people from outside the industry and create the means to train them.

2. Growing in a soft P&C market

3. Growing, but doing it profitably

4. Keeping strong relations with multiple carriers

5. Providing superior customer service (differentiating ourselves from our competitors)

Challenges They Face

Factors Most Critical to Agency’s Success (Top 5 Listed in Order of Frequency Mentioned

As we have seen, people are the most important key to the success of these firms. It is not surprising that the biggest challenge faced by these agencies is also their ability to find and hire talented employees, particularly producers. These agencies hired an average of two producers during the last fiscal year with 70% of those hired coming from another insurance broker or from an insurance carrier. Twelve percent (12%) of those hired came directly out of college, with the other 18% being hired from other industries. These agencies report that they have been successful with two out of every three producers that they are hiring. These agents also report that they are being challenged by the soft property and casualty market, the necessity to do more for their employees, the need to provide additional services to their customers (in order to differentiate themselves from their competitors) and the constant need to add support staff and infrastructure to respond to the growth that they are achieving. All of this makes it more difficult to make a profit. Nevertheless, these firms have been successful in achieving very attractive levels of profitability and they have done it through good use of technology, improved operating efficiencies and more selectivity in the business that they are writing.

1. Finding quality sales and service employees

2. Driving a sales and service culture

3. Motivating and retaining top employees

4. Strong carriers and great relations with them 5. Effectively addressing perpetuation of ownership and operations

In addition to finding and hiring these individuals, a critical success factor will be the ability to make certain that their agencies are places where the best and the brightest want to come to work. This happens most frequently when these agents provide a quality working environment where people can grow, develop and be highly successful.

89 2007 Best Practices Study | Agencies with Revenues Between $5,000,000 and $10,000,000 | Executive Perspectives