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January 23, 2013

Benefits of Benchmarking - From an Agency Management Perspective

2 min read

Topic: Insurance Marketing Insurance Agency Management Insurance Agency Growth Strategies

By Tony Caldwell, Chairman and CEO

Recently, Oklahoma Business Insurors, our retail agency was named a Best Practices Agency by the Insurance Agents and Brokers Association. It was the third year in a row we were named to this select group of less than 2% of independent agencies countrywide. Of course we are proud of this accomplishment, but that is not the point of this article.

How do you know that your agency is as profitable as it should be? How do you know if your staffing ratios are balanced for your business and planned growth?

Do you know exactly when you should be hiring your next employee? How do you know you are spending an appropriate amount for rent, employee benefits, insurance, etc.? How many insurance carriers is optimal for your book of business? Is your business worth as much as the "average" agency or is it worth more or less? Among the most beneficial and appropriate ways is to benchmark your business against your peer agencies.

We have found since we founded our agency that comparing our agency to well established benchmarks has helped us to grow consistently and profitably. It has allowed us to make sound business decisions throughout the time we have been in business. The IIABA recognition is just that: a recognition of what we have known all along. 

Over the last few weeks I've met with several OAA members who have questions about the management of their agency. My first question is, "Do you benchmark"? Usually the answer has been no. If that describes you, I recommend that you begin this valuable management process as soon as possible. OAA maintains the most up to date information on this, and if you contact Lance Singleton or Kelly McLemore they would be happy to send it to you and work with you, if you like, to establish how you compare, and discuss the benefits of benchmarking. 

I am also always available to meet with you about agency management, or any other topic.