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Marketing Clusters - A Means Of Growth And Survivalclustering going on today, many cluster managers have been bombarded by t...

... Blog Photos Group Connections Reviews IMMS Library Immerse yourself in our stacks. Take some time and browse through our library. We have thousands of articles, checklists, tip sheets, sales letters, and more! Communications Marketing Customer Service Planning Finance/Accounting Risk Management Human Resources Selling Legal and E&O Technology Life/Financial Services Glossaries Management Resources & Links Categories Popular Recent All Back The Impact Of Clusters On Agency Value 4/30/2013 12:00:00 AM by CompleteMarkets Editor , Chris Burand This content has not been rated yet. In this document, Chris Burand addresses the question of how an agency's value is affected when it doesn't own any company contracts because it's part of a cluster. Historically, independent insurance agencies have owned two intangible assets: Their customer lists and their ... situation, the relatively lower agency commissions and minimal contingencies are easy to identify and factor into valuations. But how is an agency's value affected when it doesn't own any company contracts because it's part of a cluster? As with all good valuation answers, the answer is, "It depends." To learn the effect of not owning any contracts, we have to look at how the cluster affects profit, growth, and risk, which are the three keys to all valuations (together with the buyer's or appraiser's perception of these factors), and the quality of the agency's balance sheet. PROFITS Many agencies join clusters and give up their contracts to consolidate volume and thus increase contingency income. They assume that if they double volume, that they'll more than double their contingency bonuses. However, ...

The Impact Of Clusters On Agency Value
In this document...e that the negative effect of a poor cluster agreement doesn’t outweigh the benefits of clustering.

Clustering Revisited
CLUSTERING REVISITED   by Roy Phillips   Learn from this clustering success story.   In the 1...ment philosophy. Whichever the case, clustering is clearly playing a role in t...

Agency Cluster Profile
AGENCY CLUSTER PROFILE   ...] and doing business under the name [cluster name].   ...

... can generate enough revenue so that they can offer quality service and stay profitable. The volume that markets have been requesting during the past 10 years has been rising steadily and will continue to rise. If carriers are looking for new ways to stay profitable, it's reasonable for agencies to do the same, and many agents are ensuring their livelihoods by forming a variety of coalitions. Mergers, acquisitions, clusters, and associations will continue to grow in popularity as agents look for ways to meet the needs of their customers and their markets. All of these options have pros and cons and require careful study. STRESS PROFESSIONALISM At the end of the day, we all prefer to work with people who do their jobs well and have good people skills. Ensuring that your staff are well trained and have ... 12:00:00 AM by CompleteMarkets Editor , Brenda French This content has not been rated yet. What do your companies want — and how can you give it to them? In working with your companies, the first question to ask is: "What do your companies value?" Insurance companies use the same decision-making criteria as agents, but in a different order. Insurers refer to profits first and relationships second, while agents base their decisions on relationships first and profits second. Insurance companies assess risk and use their capital to make a profit for their shareholders. If Agent A helps them make a profit, the company will want to develop this relationship further. If Agent B doesn't make a profit for them, then they won't be interested in furthering this partnership. Conversely, ...

... smarter, not harder by concentrating on the guidelines in this article — and you'll enjoy lower costs and higher profits. Bill Schoeffler, CIC, and Catherine Oak, CIC, CRM, AAI are partners in the consulting firm, Oak & Associates, based in Northern California. The firm specializes in financial and management consulting for independent insurance agencies, including valuations, mergers acquisitions, clusters, sales and marketing planning as well as perpetuation planning. They can be reached at (707) 936-6565 or by e-mail at [email protected] . Login or Register (for FREE) to gain access to thousands of other great articles. Need more reasons to join? Need insurance for you, your business or your family? Get quality appointments - Save yourself a whole lot of time ... Reviews IMMS Library Immerse yourself in our stacks. Take some time and browse through our library. We have thousands of articles, checklists, tip sheets, sales letters, and more! Communications Marketing Customer Service Planning Finance/Accounting Risk Management Human Resources Selling Legal and E&O Technology Life/Financial Services Glossaries Management Resources & Links Categories Popular Recent All Back Four Ways To Cut Costs And Increase Profits 4/30/2013 10:43:49 PM by CompleteMarkets Editor , Catherine Oak This content has not been rated yet. FOUR WAYS TO CUT COSTS AND INCREASE PROFITS by Bill Schoeffler and Catherine Oak There's more of an emphasis on watching expenses today in order to return a reasonable profit. Many owners feel that they run a tight ship; however, their proximity to the action might ...

... if you were going to sell it today. Streamlined operations have fewer problems and generate better bottom-line profits. The owners of these agencies will make more money now and in the future. Bill Schoeffler, CIC is a partner in the consulting firm, Oak & Associates, based in Northern California. The firm specializes in financial and management consulting for independent insurance agencies, including valuations, mergers acquisitions, clusters, sales and marketing planning as well as perpetuation planning. Schoeffler can be reached at (707) 936-6565 or by e-mail at [email protected] . Reproduced by permission from Insurance Journal magazine. Login or Register (for FREE) to gain access to thousands of other great articles. Need more reasons to join? Need insurance for you, your business or your family? Get quality appointments ... the down payment might not be realized. Keep in mind that many of the famous lucrative deals were done between 2000 and early 2004. During much of this time, the hard market in Commercial Lines was in full swing. Employee benefits also increased at a double-digit pace in this period. Projected growth rates looked tremendous for insurance agencies, allowing sellers to play off these rates to project large future profits. Buyers at that time, especially those outside of the insurance industry, had been willing to accept projections of double-digit annual growth (even as high as 30%) for the next few years. By using such high growth rates over several years, sellers could use the future earnings method of calculating value to project a high value. Also during this period, profit/expense ratios for ...

...t squeeze Merger/acquisition/cluster movements Banks in insurance ...t for at least 50% of a larger gross profit. Include every imaginable factor. ...

...g sellers to project large future profits. Buyers at that time, especially tho...lems and generate higher bottom-line profits. The owners of these agencies wil...