2018 marks 25 years of learning from the best via The Big “I”‘s Best Practices Study
The Big “I” has published the results from its annual benchmarking update, The 2018 Best Practices Study, which the Big “I” has published in partnership with Reagan Consulting since 1993, seeks to help agencies achieve growth, value and operating excellence through the four main objectives of the study:
- Allow agents to better understand their performance
- Make agents aware of the performance of the best agencies in the industry
- Identify the factors most critical to the success and viability of agents
- Provide the necessary training, tools, and resources to allow agents to elevate their performance and prosper
In celebrating the silver anniversary of the study this year, Bobby Reagan, the CEO of Reagan Consulting include a brief overview of the past 25 years in his introductory remarks in the report. In particular, he highlighted the significant changes and transformations the industry has undergone over the past quarter century.
The insurance agency/brokerage business and the world in which it operated were both very different in 1993, when we issued the first Best Practices Study. The World Wide Web was still in its infancy, with a total of just 600 websites. Laptop computers, email, texting, and even Google were foreign or non‐existent concepts to most Americans. Bill Clinton took office in his first term as President, and the most popular movie was Jurassic Park…
As for the study, that too has evolved from the first one which included the best practices of 150 agencies to the 260 agencies who are queried and analyzed for this year’s study.
In his opening remarks, Big “I” President and CEO Bob Rusbuldt, echoed the changes that the Best Practices Study has seen over the past 25 years while highlighting the fact that the essential mission of the study remains the same.
For 25 years, the Best Practices Study has allowed agents to understand what areas they need to focus on in order to achieve maximum impact. Agency resources are limited, so it is critical for agents to understand how to influence situations and decisions they believe are beyond the agency’s control. Focusing resources on those issues which the agency can measure, monitor, and influence results in a greater opportunity to affect real change and foster success.”
This is achieved by allowing agencies of any size to compare their performance vis a vis other high-performing agencies from across the country. By providing metrics and benchmarking data with regards to profitability, mergers & acquisitions, and perpetuation, agencies have invaluable data in which to craft their strategies and performance metrics for their success.
Growth and Commercial Lines are the major takeaways from this year’s study
While not sharing all of the secrets of this years study, the big takeaway this year is the overall growth in the industry over the past year. Surprisingly, a significant factor of that growth stemmed from Commercial rather than Personal Lines. The following are all of the bullets points that the Big “I” shared with regards to the study:
- Overall, organic growth averaged approximately 4.6%, marking a slight increase from last year.
- Commercial lines was the largest organic growth engine for most agencies, surpassing personal lines and life-health. Some of this growth is was driven by improving p-c rates and an expanding economy.
- Still, organic personal lines p-c growth remains strong, up to 3.3% from 3.1% in 2017.
- As measured by sales velocity, new business increased slightly compared to 2017.
Which Massachusetts agencies participated in this year’s study?
Agencies are chosen to participate in the “Best Practices” study via a nomination process. To be considered, an agency’s nomination must be forwarded to the Big “I” and Reagan Consulting through either a Big “I”-affiliated state association or through an insurance company.
In general, agencies are selected based upon certain criteria including outstanding management and financial achievement in “…six revenue categories (less than $1,250,000; $1,250,000 to $2,500,000; $2,500,000 to $5,000,000; $5,000,000 to $10,000,000; $10,000,000 to $25,000,000; and more than $25,000,000). Once selected, the agencies are part of the bench-marking study for a three-year cycle.
This year, these nine Massachusetts independent agencies participated in the study.
- FBinsure, Taunton
- Garrity Insurance Agency, Cambridge
- Greylock Insurance Agency, Pittsfield
- J.K. Olivieri Insurance Agency, Middleboro
- Kaplansky Insurance, Needham
- Mid-State Insurance Agency, Worcester
- MTM Insurance Associates, North Andover
- Risman Insurance Group, Medford
- Tetrault Insurance Agency, New Bedford
