by Tommy McDonald, Vice President – MarshBerry
WRITE 20% NEW BUSINESS. In our experience, understanding the metrics needed to produce predictable profitable organic growth is #1. Less than 10%* of the industry can produce new revenue in excess of 20% of prior year commission and fees. The simplest answer to the question starts with setting a goal.
HAVE SALES PEOPLE THAT SELL. If you dissect the industry, break down all of the variables of insurance brokers, employee benefits consulting firms and agencies all over the country, analyze performance, run ratios, dig deep on numbers, compensation, successes, challenges, weaknesses, and everything in between, the answer to the growth question may be as simple as “hire, develop and retain” great sales people.
DON’T HAVE SALES PEOPLE THAT DON’T SELL. What does it take to grow? Top performers understand the importance of protecting your sales culture from non-performance.
VALUABLE VALUE PROPOSITION. What makes your firm different and how does the client see value in this difference? Simple question with complex answers. If you have tools and resources that your clients value, and it actually creates value (results) for your customer, then growth will come. Niche development, unique tools and resources, taking underwriting risk, developing technology, integrating outside resources into the platform and hiring internal resources to help drive these initiatives all fall under the blanket of “delivering value differently.”
NON-SALES TALENT MATTERS. Look around your service and resource staff. How many of these people can go see your best customer without a sales person in the room? Who leads your service team? How valuable are they to your growth machine. Your sales team is only as strong as the leadership and service team allows them to be. Upgrade throughout.
NEW TALENT. If you aren’t hiring today, you aren’t growing tomorrow. It doesn’t just have to be producers. Invest in new talent for future growth.
MARKECHNOLOGY. Relying solely on sales people to drive organic growth is old school insurance. Leveraging technology, marketing, and pulling together a plan on how to supplement “producer pushed opportunity” with “marketing pulled opportunity” will help keep the 20% new business sustainable.
*Based on Marsh, Berry & Company, Inc.’s proprietary, formalized financial management benchmarking system, Perspectives for High Performance (PHP). PHP utilizes more than 400 key ratios that are designed to analyze insurance agency performance. The PHP database represents more than $5 billion in aggregate agency revenue and we have more than 1,000 independent insurance agencies and brokers1 across the United States and Canada providing data for benchmarking services.
Source: MarshBerry Opinion and Experience. Individual results may vary. Visit Marshberry.
There may be some duplication in the number of firms counted as certain firms subscribe to and/or provide data for multiple benchmarking services. Past performance is not indicative of future results.
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