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

Maximizing Productivity

Gaining a Competitive Edge

Although our industry has always complained about the state of technology within the agency world, many of these agencies are finding that technology is having a very positive impact on their productivity and customer service. Agents report that imaging and the ability to go paperless has significantly improved productivity, as has giving their employees dual monitors and remote access to their systems.

“The most sustainable competitive advantage that a service business can have is the quality of the people.” That adage is certainly supported by these agents who feel that their greatest competitive advantage comes from the quality of their staff. They also feel that being privately-held gives them a material competitive advantage in their ability to hire the best and the brightest and that many customers would rather deal with privately-held firms. As would be expected, competitive advantage has been created for these firms by adding value-added services in both property and casualty and employee benefits. They have also achieved competitive advantage by focusing on selected niches where they have developed specific expertise and services unique to those practice groups and niches. With the average firm in this group growing organically by 12.0% and the top 25% growing by over 20%, it is clear that they are finding competitive advantage.

Keys to Maximizing Productivity (Top 5 Listed in Order of Frequency Mentioned) 1. Effective use of technology (imaging, dual monitors, remote access, etc.)

2. Measuring, monitoring and managing productivity

3. Investing in employee training and education 4. Developing standardized systems and procedures

5. Increasing average account size

Keys to Achieving a Competitive Advantage (Top 5 Listed in Order of Frequency Mentioned) 1. Strong, stable, well-trained staff

Enhanced productivity has also come from “measuring, monitoring and managing” productivity. For many, this is measuring revenue per employee or being more specific in looking at the number of transactions or activity per employee. If you want to get serious about improving productivity, you need to start by measuring and monitoring performance. Once this is being done, the key to these agents’ abilities to manage and improve productivity, is their willingness to invest in employee training and education. In addition, improvement has come from developing standardized systems and procedures. Finally, these agencies also report that they have achieved significant improvement in productivity by increasing the average account size and by providing levels of service appropriate for given accounts.

2. Being privately-held

3. Strong carrier relations

4. Value-added services provided

5. Niche focus (not being all things to all people)

90 2007 Best Practices Study | Agencies with Revenues Between $5,000,000 and $10,000,000 | Executive Perspectives