Profitability and growth continue to be the drivers of independent insurance agency valuations, and leading agencies around the country are using new ways to produce profitable growth.
“You cannot have strong profits, and you cannot grow, unless you are using technology effectively,” said Shirley Lukens, principal, Reagan Consulting, Atlanta, one of the speakers at the TENCon, ASCnet’s annual Technology, Education & Networking Conference in Florida. ASCnet is the user group for Applied Systems customers.
Lukens, who is project manager of the Best Practices study produced in conjunction with the Independent Insurance Agents and Brokers of America, noted that the first Best Practices study in 1993 found an average revenue per agency employee of $81,000, compared to $150,000 today.
“Most of that increase in revenue per employee for Best Practices agencies has been driven by technology implementation,” she said.
Citing data in the 2010 Best Practices study, Lukens said agencies also are using technology in marketing by embracing email and social networking tools to reach prospects and connect with clients.
Three agency leaders gave insights into methods of agency management system utilization.
Ryan Headley, principal and chief technology officer, Stratton Agency, San Carlos, Calif., which aims to exceed $210,000 revenue per employee, said that his agency must use social technologies to match its customer base. “We use the power of social media. We are using these ways of communicating that you didn’t have three years ago. We can publish something on our blog that is then sent out through Twitter and then to Facebook,” he said.
Headley said that consumers younger than 40 are looking for knowledgeable, professional independent agents to protect their interests, but want to be connected via social networking tools. “We’re in the data revolution now. We had mainframes, then software, then the Internet. Now we have data and all the connections it can give us” as agents, he said.
Donna Barr-LaGoy, president, Premier Insurance Consultants, Palm City, Fla., said she took her agency paperless after purchasing it two years ago. Experience was her teacher. Barr worked for a large broker with a home office in New York City’s World Trade Center, and encountered several hurricanes when she worked in its South Florida office later in the decade.
“I knew what I wanted when I bought my agency,” she said. “I needed to be paperless, and I got rid of every single paper file.”
Her current two-person agency also uses call center backup capabilities on a routine basis, which allow her flexibility to be in touch without having employees in the office. “Because of the technology we are able to spend more time being proactive with our clients, reaching out to them and actually spending time visiting them,” she said.
Lisa Parry-Becker, vice president, William B. Parry & Son, Langhorne, Pa., said that Hurricane Irene and Tropical Storm Lee found her out of power but not out of business. She was able to stay in touch with clients via cell phone, email and social networking, despite not being able to physically cross the Delaware River from New Jersey to visit client sites in Pennsylvania.
Technology is enabling growth opportunities, Parry-Becker said. Her agency used analysis tools in its agency management system to generate a list of clients with coverage gaps in medical benefits, then created an email and letter campaign to those clients. “In most cases we were able to upsell” by following up with a phone call, she said.
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