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

next five years,” the need for talented individuals permeates all aspects of agency operations. A close second to talent is technology. Agents are working to keep up with advancing technology and to use technology to their advantage in the marketplace. One agency executive related that their number one challenge is “finding ways to compete in the digital / social media marketing world.” Many agencies echo

Top Adjustments (Top 5 Listed in Order of Frequency Mentioned) 1. Doing nothing at this time 2. Partnering with a Benefits Firm 3. Staying informed 4. Selling Ancillary Products 5. L&H products not sold; no applicable response

Top Challenges (Top 5 Listed in Order of Frequency Mentioned ) 1. Finding and retaining talent 2. Technology

After evaluating the changing requirements of healthcare reform, agents can then determine how they would like to respond. Often that response is to involve a partner agency. “We have aligned with a proven local financial services and benefits company,” notes one agency executive, “to offer specialized coverage and service to our clients.” The advantage of a partner may be to leverage the resources and knowledge that the partner has already built. Health care reform presents both challenge and opportunity. “It is a moment of truth for health brokers across America,” responded one agency executive. “Some brokers are not investing the time and effort to be a good consultant. I see opportunity for brokers who are prepared.” Facing Challenges The challenges facing this group of agencies are diverse, but at the top of the list is talent. Whatever the market position, strategy or location of a firm, an insurance agency requires quality people to maintain its success. Nothing is more critical to the agencies in this study group than continuing to find and develop these individuals. “We have little turnover,” remarked one agency executive, “but it is imperative that employees are satisfied professionally and personally while working for our agency.” The search for talent for these firms covers all areas of the agency. From “hiring young people to get into the industry” to “finding good, reliable support staff” to “replacing employees that will be retiring in the

3. Carrier volume and carrier relationships 4. Rate increases due to retention issues 5. Direct writers

this concern. As the uses for social media in a business context evolve, agents are working hard to stay at the forefront. Following talent and technology, the next several challenges were carrier-related. From satisfying carrier volume requirements to dealing with carrier rate increases to competing with direct-writers, the carrier universe has produced its share of challenges for these firms. One agency notes that “Getting new markets is the biggest challenge while balancing ‘feeding’ existing markets.” The challenges mentioned by the agencies in this study group are somewhat different than three years ago, when maintaining growth and controlling expenses were two of the top five challenges in the aftermath of the financial crisis. Though there will always be challenges, these agents are performing well and are optimistic about the future. “All in all,” one agency owner noted, “I’m still glad to have an insurance career and own an agency.”

2013 Best Practices Study

Agencies with Revenues Under $1,250,000

“We have little turnover, but it is imperative that employees are satisfied professionally and personally while working for our agency.”

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