2013 Best Practices Study

Analysis of Agencies with Revenues Under $1,250,000

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

Developing New Producers With a NUPP of 3.7% and a producer success rate of over 75%, agencies in this study group are highly focused on finding, attracting and developing producers. In order to accomplish this goal, firms are relying primarily on training – both internal and external.

firm notes, “are reviewed weekly and training is made available to address the need.” For this group of agencies, the key to developing producers may lie in understanding the producer hired and adapting the mentoring and training offered to fit that producer’s need. Hiring a producer is a relatively rare occurrence for these agencies – only about a quarter hired a producer in the past year. Many of these firms have found hiring in their markets difficult or are gun-shy from recent hiring failures. Others acknowledge the time and investment required to develop a producer and have decided to attempt to acquire producers or to increase the capacity of existing production staff. Given the relative infrequency of producer hires – and the magnitude of the investment for these agencies – the development of these producers is critical. Adjusting to Health Care Reform For many of the firms in this study group, healthcare reform is not a grave concern. Total life & health revenues average only about 5% of agency revenue for these firms, so even a complete loss of life & health revenue would be only a “flesh wound.” Not surprisingly, preparing for healthcare reform was a non-issue for many firms and many others said they were doing nothing to prepare. Others, though, are doing what they can to prepare their business for the evolving health care environment. The primary responses involve staying informed, partnering with experienced and savvy employee benefits brokers and exploring ancillary products. Staying informed seems to be the key to figuring out whether a response is needed and what the response should be. One agency executive captured the essence of staying informed: “Our clients are going to need to be educated about the changes headed their way. We are attending educational opportunities ourselves so we can help lower the learning curve for them.”

Keys to Developing New Producers (Top 5 Listed in Order of Frequency Mentioned) 1. Mentoring 2. Carrier-provided training 3. Sales-specific training 4. Actively track pipeline and process 5. Promote CSRs to producer rank

First and foremost, agencies are quick to acknowledge the value of mentoring. Mentoring comes in different forms – ride-alongs, time with agency owners, etc. – but these agencies believe that close coaching relationships are the most effective way to develop producers. As one agency executive put it, “I realize I have to invest in a producer and I look forward to the process of mentoring a young person in this business.” Following the internal coaching and training provided through a mentor relationship, agencies in this study group leverage outside training available through carriers and through sales coaches and sales trainers. In fact, many of the agencies in this group use both carrier schools and outside sales consultants to develop producers. The advantage to this approach, it seems, is a healthy combination of product training and education on the sales techniques and strategies necessary to be successful. “Education needs,” one

2013 Best Practices Study

“It is a moment of truth for health brokers across America. Some brokers are not investing the time and effort to be a good consultant. I see opportunity for brokers who are prepared.”

Agencies with Revenues Under $1,250,000

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