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...ing individual producer performance-not only the size of the book of business,...1) 417-9864. Pam lives in Northern California and can be reached at (530) 295-1083. The location of Transformation Advisors, Inc. is 581 Short R...

... Risk Management Human Resources Selling Legal and E&O Technology Life/Financial Services Glossaries Management Resources & Links Categories Popular Recent All Back Are Your Producers Subsidized?4/30/2013 12:00:00 AM by CompleteMarkets Editor , Chris Burand This content has not been rated yet. If you don't think you're subsidizing your producers, you might need to think again. The average agency spends between $1.02 and $1.04 for every commission dollar earned (" Growth and Performance Standards," APIS, 2000) . The ... RENEWALS One source is renewals. Many contend that businesses in all industries lose money on new sales. Because the loss is erased with repeat sales, why worry? Most insurance renewals are definitely less expensive than new business. Although many agents believe that renewals are more profitable because producers are usually paid less, compensation alone isn't that significant. Hit ratio is the critical factor. The hit ratio on renewals is usually in the high 80s, versus 25% at best on new business. Although hit ratio is the key to making ... agencies. Even with higher profits, a producer's repeat sales (renewals) usually aren't profitable enough to turn an agency's loss into a profit. In fact, our studies have found that some agencies spend as much as $1.70 for every renewal commission dollar earned! HOUSE BUSINESS Because renewal profits alone can't support producer's new sales, another key source of subsidies is house business. House business is usually the most profitable because no one gets a commission on it. It helps to subsidize the entire agency, especially producers with small books ...

... Resources Selling Legal and E&O Technology Life/Financial Services Glossaries Management Resources & Links Categories Popular Recent All Back Agency Valuation: Have The Fundamentals Changed?4/30/2013 10:45:23 PM by CompleteMarkets Editor , Bill Schoeffler This content has not been rated yet. AGENCY VALUATION: HAVE THE FUNDAMENTALS CHANGED? by Bill Schoeffler Which comes first, the chicken or the egg? There's a general perception that agency value has been increasing during the past few years. Bill Schoeffler explains why this belief, which ... . 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 ... use the future earnings method of calculating value to project a high value. Also during this period, profit/expense ratios for publicly traded brokers were peaking. The alphabet houses were able to use these high P/E ratios to make lucrative offers to sellers. What's more, changes to accounting rules provided more favorable write-offs of purchases by publicly traded firms. Buyers were still in high gear throughout 2004. Brown & Brown, Arthur J. Gallagher, and Willis did 22, 17, and 10 acquisitions respectively during this period ...

...an’t support producer’s new sales, another key source of subsidies is house bu...tment pay its own way. Your agency’s profits will skyrocket by doing so!

...rts from major corporations — not to mention the jitters on Wall Street ...plus some additional points to make up for the fact that it might have less re...

...% for new and renewal P/C business. Not surprisingly, this agency had the usua...itional 1% on the entire $55,000 goal, not just on the $5,000 addition to the ...

...bout Life! At age 4, success is not peeing in your pants. At age 12, succ...o theirs and send much more. Thank you for your generous contribution! Mich...

... Human Resources Selling Legal and E&O Technology Life/Financial Services Glossaries Management Resources & Links Categories Popular Recent All Back Administrative Expense Changes For The Life Operation 4/30/2013 12:00:00 AM by CompleteMarkets Editor , david goodwin This content has not been rated yet. Here's a letter I received recently: Dear Dave: I am the manager of a four-person Life/Benefits department of a P/C agency. The agency is set up with profit centers such as Personal Lines, Commercial Lines, Surety ... and Life/Benefits. Each profit center shares in the common overhead of the agency office supplies, salaries, etc. I have no problem having my department pay for what it uses. My problem comes from being charged roughly one-fourth of the common overhead for the total agency, for such items as agency administration, accounting, legal services, taxes, repair and maintenance, etc. Those agency costs are high and take a big chunk out of our department's income. Agency owners are firm in saying that each profit center must ... have no share in the P/C profits, no equity in the P/C agency, and perhaps only secondary interest in the inner workings of the agency. More important, Life producers pay' for Life leads by splitting commissions with the P/C house. If it's a fair split, the payment satisfies their obligation to the P/C house for leads. If, in addition, Life producers were also expected to help pay for the cost of producing those leads (i.e., the cost of running ...

...nd that one or more employees would not have to be replaced, the staff should ...nimum Size: No renewals should be paid for Personal Lines accounts as they are...

...several years, there have been some notable acquisitions that seemed to push t...ak & Associates, based in Northern California. The firm specializes in financial and management consulting for independent insurance agencies, inc...