A survey of high growth insurance firms conducted and released late last year by a Texas-based consultant found that such organizations hire differently and produce business differently than low growth firms.
They also make use of specialized skills and research to build connections and networks, while lower growth firms generally do not, according to Julie K. Davis, founder of Risk Communities LLC, a research, branding and marketing firm based in Austin, Texas.
Speaking at the Independent Insurance Agents of Texas’ Joe Vincent Management Seminar, Davis said in 2014 her firm conducted a survey of 32 insurance industry organizations, including insurance agencies, insurance carriers, insurance wholesalers, law firms specifically serving the insurance sector and claim organizations across the United States. Their sizes started at $1 million in annual revenues and went up there.
The survey sought to determine how high growth firms handled business challenges, how they built and maintained consistent growth, the role of research and marketing budgets.
In the 2014 survey, “we interviewed all of our participants and asked what were their most highest business challenges. Over half ranked talent attraction and retention and finding new prospects” as areas in which they struggle the most, Davis said. “What we found was those two were intermingled.”
Other challenges included increased competition from different sources, and building and branding reputation.
“Maintaining a technical competence was the lowest-ranked item,” Davis said. The surveyed firms knew there were many sources to get the education necessary to build insurance technical competence.
When hiring, high growth firms valued specialized skills and expertise, Davis said
The high growth firms consisted of “individuals or groups of individuals that were known in their niche. They had built-in connections and networks. They used social media, publishing and expert speaker and interviews at a very high level. They built business on the strength of who they were as compared to other firms.”
Due to their niche identification, their networking and social outreach, such firms found it easy to attract leads, “and many of them had a strong entrepreneurial track record of innovating new products,” she said.
On the other hand, low or average growth firms typically did not have specialty niches and self-identified as generalists.
Employees at such firms tended to have high level technical skills “but they didn’t really have the skill set to build leads on their own. They depended on one or two rainmakers in the insurance agency,” Davis said.
The lower growth firms also had little use for branding tools, such as social media, publishing and expert speaking, and they usually did not have an entrepreneurial track record when it comes to building businesses.
Low growth firms focused on market quotes, quote comparison, and had little focus on the coverage element.
The lower growth companies also did not necessarily seek to understand “the client’s unique risk profile and some of the challenges and some of the trends they might be facing,” she said.
By comparison, high growth firms tended to utilize research not only to find new trends in the marketplace and launch new products and services, but also to better understand the needs of their clients.
“More than half of the firms surveyed used research as the primary tool to generate new business revenue. The research, again, was their primary foundation piece for building their network, their referrals and recommendations. It also is a primary piece for uncovering new needs and problems and creating solutions,” Davis said.
She cited as an example a “particular brokerage focused on writing coverage for paper recyclers.”
Through a study of the industry the brokerage found that paper recyclers had a high “level of privacy concerns and cyber liability problems. They did research, created surveys, did interviews. And they launched a product called Shredder Guard which provides privacy liability to the paper shredders,” she said.
The paper recycling program resulted from an opportunity to develop new products for existing customers that came out of a client satisfaction survey, Davis said.
“The paper shredders were saying ‘you’re not really doing enough for our industry, there’s a particular hole that needs to be filled — that is the privacy liability, the cyber liability issues,” she said.
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