Washington — The Independent Insurance Agents & Brokers of America (IIABA), a national association of independent insurance agents and brokers, released its annual Best Practices Study, which includes the new Rule of 20 statistic, which provides a quick means of calculating whether or not an agency creates value for its shareholders.
The 2007 Best Practice Study names 195 new agencies in six agency revenue categories ranging from under $1.25 million to over $25 million. IIABA will follow the financial results of these agencies for the following two years, and publish annual updates. New to the study this year is greater detail for both revenues and expenses, which provides more meaningful benchmarks for better “apples-to-apples” comparisons of the agencies.
The leading agencies included in the annual study must be nominated for participation. Once every three years, the IIABA asks their insurance company partners, state association affiliates and other industry organizations, to nominate those agencies they believe to be among the most efficient and high-performing agencies in the industry for each of the studies’ revenue categories. These agencies are asked to submit operational information in many areas. This information is carefully evaluated and ranked, culminating in the choice of the top 30 agencies in each revenue category earning the status of Best Practices Agency.
This year’s study shows, overall, that agencies are doing more with fewer people, and the organic growth rate was stronger than expected. The new crop of Best Practices agencies were asked to what they attributed their success, and, overwhelmingly, regardless of agency size, they noted “the quality of our people.” This quality can be defined as a strong work ethic, expert knowledge in agency products and services, high ethical standards and dedication. These factors, coupled with advanced proficiencies with agency technologies, allowed the 2007 Best Practices Agencies to push productivity levels higher than ever. “These are just two of the myriad reasons that the Best Practices Agencies continued to grow, be more productive and achieve quantifiable success,” says Madelyn Flannagan, VP for education and research.
The study, and a listing of the 2007 Best Practices Agencies, can be accessed through the Web sites of IIABA and Reagan Consulting or directly at bp.reaganconsulting.com. Through Reagan’s site you can also view an HTML version of the current and past Executive Updates; download a Best Practices comparison spreadsheet to compare your agency’s year-end results with the study’s results; access other Best Practices studies, tools and products, and download order forms.
The annual Best Practices Study originated in 1993 as an initiative by 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 can be adopted or adapted for use in improving agency performance, thus enhancing agency value. IIABA retained the principals of Reagan Consulting to create and perform the first Best Practices Study.
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