Since 1993 the annual Best Practices Study has served as a tool to help agency owners and managers understand how their business operations perform and measure up to the top performing firms across the country. It is a "must have" for those agencies that want to become the best they can be.
The 2011 Best Practices Study provides critical performance benchmarks in six agency revenue categories ranging from Under $1,250,000 to Over $25,000,000. Agencies can measure, evaluate, and compare results for agency operations including:
- Income & Expense Distribution
- Revenue & Profitability Growth
- Production & Service Staff Compensation/Productivity
- Technology Expenses
- P&C and GL&H Carrier Representation
- And much more
Several new benchmarks were added last year including the NUPP statistic. This metric indicates whether or not an agency is making a sufficient investment in new producers. The study also provides statistics on the agencies’ Commercial and Life & Health books of business by providing a breakdown of accounts by commission size. In addition, service staff positions have been broken out to provide productivity benchmarks for account executives/senior CSR positions. If you have not used the study in the last year or two, be sure to review these additions.
The annual Best Practices Study originated in 1993 as an initiative by the Independent Insurance Agents & Brokers of America (IIABA) to help its members build and maintain the value of their most important assets, their agencies. By studying the leading agencies and brokers in the country, the association hoped to provide member agents with meaningful performance benchmarks and business strategies that could be adopted or adapted for use in improving agency performance, thus enhancing agency value.
The IIABA retained the principals of Reagan Consulting to create and perform the first Best Practices Study. Annual updates conducted by Reagan Consulting continue to provide important financial and operational benchmarks, and the study is recognized as one of the most thoughtful, effective and valuable resources ever made available to the industry.
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Once every three years, the IIABA asks insurance companies, state association affiliates, and other industry organizations to nominate for each of the studies' revenue categories those agencies they believe to be among the better, more professional agencies in the industry.
The nominated agencies are then invited to participate. They must be willing to share key business practices/philosophies and to complete an in-depth survey detailing their financial and operational year-end results. Those results are then scored and ranked objectively for inclusion on the basis of operational excellence.
In 2010 more than 1,200 independent agencies throughout the U.S. were nominated to take part in the annual study, but only 224 agencies qualified for the honor. To be chosen, the agency had to be among the top-performing agencies in one of six revenue categories. Their year-end results and business practices were compiled to create the 2011 Best Practices benchmarks.
Taking part in the Best Practices Study has become a prestigious recognition of the superior accomplishments of the top insurance agencies in the country. Those agencies that believe they have the qualities of a Best Practices Agency and wish to be nominated should contact their state association.
The electronic Executive Update of this study can be accessed via the websites of IIABA (www.iiaba.com) and Reagan Consulting (www.reaganconsulting.com) or directly at (http://bp.reaganconsulting.com/).
From the Best Practices Gateway home page users can to do the following:
- View an HTML version of the current and past Best Practices Study Executive Updates
- Download a Best Practices comparison spreadsheet to compare their year-end results with the study's results
- Access other Best Practices studies, tools, and products
- Download Order Forms
In addition to the annual Best Practices Study, many other useful studies, resources, and tools are available to help agencies improve their performance and enhance the value of their businesses. Two of the most frequently used tools are The Agency Self-Diagnostic Tool and the Joint Agency Company Planner. These Best Practices tools are part of a complete line of Best Practices products and services. Order forms can be downloaded from (http://bp.reaganconsulting.com/).
If you have questions about the information published in the
2011 Best Practices Study please contact the IIABA
Education Department at 800-221-7917 or Reagan Consulting
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