2013 Best Practices Study

Analysis of Agencies with Revenues Over $25,000,000

Key Benchmarks Mgmt. Perspectives Profile Revenues Expenses Profitability Employee Overview Producer Info Service Staff Info Technology Insurance Carriers Appendix

Finally, the Best Practices agencies also recognized as a challenge, but also a need, the ability to effective develop and communicate the firm’s value proposition. Those things that give a firm its competitive advantage must be effectively developed and communicated as the firm’s brand. It should be described as the summary of the reasons that a customer would want to do business with the agency (or an employee would want to work for the agency). Many of these Best Practices agencies have not only developed capabilities that set them apart, but they have also trained their staff to be able to effectively and consistently communicate, sell and deliver those capabilities. Others have found that it is not easily done.

Top Adjustments (Top 5 Listed in Order of Frequency Mentioned) 1. Developing or considering a private exchange

Facing Challenges A couple of key themes run throughout the most frequently mentioned challenges. The most critical and most common is the impending retirement of key producers, managers, leaders and agency owners. This is clearly a reality and a big problem for many firms. It will necessitate effectively (and for many rapidly) attracting and developing producers and developing the next generation of managers and leaders. As indicated above, healthcare reform is a big challenge as well (see what Best Practices agencies are doing to respond). It is on the top of the list of challenges for many firms. The ability to maintain growth and profitability, the two most important metrics driving agency value, are both mentioned as top challenges. Also listed as challenges were several strategies that, while challenging to implement or achieve, can improve the ability to grow and be more profitable. These include developing practice groups and niches, improving technology capabilities and improving operating efficiencies. 2. Investing in compliance capabilities 3. Focusing on writing larger groups 4. Using a more consultative sales approach 5. Hiring more staff to meet demands

Top Challenges (Top 5 Listed in Order of Frequency Mentioned ) 1. Attracting and developing producers 2. Healthcare reform 3. Transitioning retiring producers and leaders 4. Maintaining good organic growth 5. Maintaining good profit margins (especially in Employee Benefits)

“There is still a lot of uncertainty but we cannot allow that to paralyze us – we are taking the steps we need to prepare us for what is likely and are keeping abreast of the changes as they occur and are staying ready to adapt.”

2013 Best Practices Study

Agencies with Revenues Over $25,000,000

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