While many insurers use a tiering method for evaluating their distributors, not all utilize a statistical approach to measure their agency force, according to “Selecting Agencies for the Future Now is the Time,” new research from Ward Group. By minimizing subjectivity and culling underperformers, carriers can improve combined ratios by 3 to 5 points by focusing on building relationships with the best agencies and improve operating results, Ward Group said.
"Carriers benefit from a distribution management practice that effectively measures agency performance, filters out the low performers and identifies the right agencies to help meet future growth and profitability goals," said Jeff Rieder, head of Ward Group. "Our experience has shown that when an agency management program is performed correctly an insurance company can lower the combined ratio three to five points and drive sustainable long-term value for both the company and their agencies.
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