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Habits Of Highly Effective Agency Owners

Habits Of Highly Effective Agency Owners. May 15, 2018. Tips to Managing Your Agency for More $$$.

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Habits Of Highly Effective Agency Owners

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  1. Habits Of Highly Effective Agency Owners May 15, 2018 Tips to Managing Your Agency for More $$$

  2. “The only person in your company who will be genuinely motivated to grow your company is you. Every minute that you spend working on tasks that can be delegated is a minute that you are not planning, strategizing and building the best business possible. This is why it's important to work on your business, not in your business.” •  Rhett Power Head coach, Power Coaching and Consulting

  3. If the value of your time to your company is worth $75 an hour, quit spending time doing $15 an hour work! • The most important work to a growing company is new & renewal revenue generating work! • Producers need to produce. Owner/Producers need to produce!

  4. Direct Live poll • Please take out your smartphones to participate in our live poll. • In your browser go to this url: • http://etc.ch/wiJx • Case Sensitive • Start Poll

  5. Overview Of Topics Today • How to be more effective • Agency Business Planning to Succeed • Key Indicators in the Agency • Keys to Higher Income & Profitability • Revenue Generating Activities • What is Your Value Proposition? • Tools to Help You Plan & Succeed

  6. How To be More effective • “Efficiency is doing things right; effectiveness is doing the right things.” • Peter Drucker (Recognized as "the founder of modern management“)

  7. How To be More effective • “There is nothing so useless as doing efficiently that which should not be done at all.” • Peter Drucker (Has been described as "the founder of modern management“)

  8. How To be More effective • Your Personal Life • As an Agency Owner • As a Producer • As a Boss • You have ONE life with different Roles in it • Daily Planning in calendar tool– Priority list – Clear Goals – Consistent Habits – most important things first – Scheduled block times for activities including daily planning • Resource Article • Multiple ways and opinions – Only wrong things to do is NOTHING to improve! • More this afternoon Session from Dr. Dennis Deaton

  9. Agency Business Planning to Succeed • Do you have a written plan to achieve your desired success? • A goal not written is only a wish • Business Planning is essential for success • Detailed=Marketing – Income – Growth – Expenses – Profit – Future – 1,3,5 Years • Did your employees give input into the plan and do they know what it is? • Do you have success defined for your agency & employees? Is it: • % profit • # of dollars • #of policies • Retention % • What is it? • Reasonable Expectations – 30% profit might be nice but….is it really reasonable?

  10. Agency Business Planning to Succeed •  “What gets measured gets improved.” – Peter Drucker • “You can’t manage what you don’t measure.” – Peter Drucker

  11. Agency Business Planning to Succeed • Do you measure your performance regularly to know if you are on target to achieve the goals & plans? • How often? • How do I evaluate

  12. Agency Business Planning to Succeed • Business plan must be in writing • Budgeting is part of the plan • Income & Expenses • Profit % • Future Needs – employees, equipment, location, automation • 1 Year Detailed • 3 Year Skeleton • 5 Year Goals • Must include measurable goals and objectives • Revenue monthly – How? • New revenue weekly – How? • Increase average commission per account – How? • Increase average policies per account – How? “If you don't have daily objectives, you qualify as a dreamer.” - ZigZiglar

  13. Agency Business Planning to Succeed • Annual plan must be very detailed & specific – Not just goals but steps to achieve those goals daily, weekly, monthly! • PL & CL – Other • Marketing to write Preferred business w/ Strategic Partner Companies • Front Line Underwrite – Protect Your Loss Ratios • Review plan at least monthly • Monitor results and make adjustments as needed • Agency Management System – Owners Best Friend – More later! • Agency Planning • Sample Business PlanSample Business Planning Tool

  14. Agency Business Planning to Succeed • I have a plan! Now What? • Execute! Execute! Execute! • Daily activities to execute the plan.

  15. Key Indicators in the Agency • Know your numbers! • What are they? • How do you monitor them? • Agency Management Systems Reports • Garbage in Garbage out! “A few percentage points can make the difference in barely surviving , or really thriving. It is not always just working harder, but worker smarter to!”

  16. Key Indicators you need to know • Average commission % in PL & CL • Preferred vs. non-standard or E&S = 15% plus vs. 10% commission = 33 1/3% less income • You can’t make it up on volume! • E&S More work and greater E&O risk • Average revenue per account – PL & CL • Needs to be increasing each year • Retention % for policies & revenue • Increasing retention increases dollars – Need to increase average policies per customer • Average # of policies per account in PL & CL • Mining for gold in your accounts – no more monoline accounts • Cross Selling Program for PL & CL • Identifies missing opportunities and go after them • More policies per customer = Higher retention “A few percentage points can make the difference in barely surviving , or really thriving. It is not always just working harder, but worker smarter to!”

  17. Keys to higher income & profitability • Focus on preferred business • Higher commission % • Manage your loss ratios – front line underwrite • Profitability is KING in 2018! • Have to be diligently writing quality business • Quit writing borderline business with preferred carriers • Policy retention above 90% - Goal to have above 95% plus • Cheaper to retain than write new business • Improving 3 points of retention could mean.....$$$$$$$$ • Example of increase $$$$$ • 34 Insurance Agency retention Strategies

  18. Keys to higher income & profitability • Must have an active referral program that brings you consistent good referrals every month – 20 plus! • Must have an active cross sell/account rounding program to write the low hanging fruit and eliminate competition. • Minimum of 2-3 policies per account – Goal 3+ on every account • Auto, home, umbrella, boat, motorcycle, toys, life insurance– Package, auto, w/c, umbrella, epli, cyber • Multiple policies increases retention significantly • Life Insurance – increases retention by as much as 10% • Use the SIAA National Strategic Partner Companies as much as possible – goal of 75% • Higher commissions • Local & national bonuses • Guaranteed national Bonuses • Write profitable business and MANAGE your loss ratio to Qualify for Profit Sharing Bonuses Every Year • The real operating profit of an agency comes from earning these bonuses every year • how about 20-30% Net operating profit each year?

  19. Keys to higher income & profitability – Producer Cautions • Straight commission producers still cost you money • How? Time – E&O – Time – Reputation – Time – Loss Ratio – Time – Support – Time • You must make money on every producer sooner than later – How much? • You should expect to make at least your % profit goal on every producer after covering your costs • Don’t be fooled by making it up on volume – a little bit of something is always a little bit • Every producer has to produce every month • You must manage every producer • Hidden costs that can kill your profit • Producers writing bad business that increases loss ratios • Carrier relationships and your reputation • Negative attitude with staff • E&O costs • Legal costs

  20. Revenue generating activities • Producers Produce – Owner producers Produce – producing new business is your top priority and should be 70% of your time • Target focus of success – Target Marketing in PL & CL • Quit chasing bad business • Preferred vs. Non-standard or E&S • Loss Ratio Matters more than ever - It okay to say NO! • Quit trying to be everything to everybody • Focus on what you do well and keep doing it better • Know your differentiators (Price cannot be all you have to offer) • Know your stuff – you are supposed to be a professional – act like it – ongoing education • Under promise & Over deliver • What’s your WOW advantage to bring people to you?

  21. What is Your Value Proposition? • Why am I choosing you to do business with? • Are you worth 10% more? • Can you sell that value proposition? Practice, practice, practice! • Become a better time manager – what is your hourly rate to do what you do? $50, $100, $200, $300 • Quit spending so much time on nonrevenue generating activities • Use your time to do things that are worth doing and are worth paying the hourly rate you have!

  22. Tools to help you plan & succeed • Agency Planning Tool • Producer Planning Tool • Producer Compensation Tools • Agency Management System Reports • Agency Management System Reports

  23. Questions??

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