Insurance Agency Management,
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"How do you know?"
As I visit with agency owners I get asked this question all the time! Here are some of my favorites:
- How do you know when to hire a CSR?
- How do you know how much profit you should make?
- How do you know if you’re paying too much (for anything)?
My way of knowing the answers to these questions, and many others, is to benchmark. Merriam Webster’s Dictionary says “Benchmark” is both a noun and a verb:
“Noun: A standard or point of reference against which things may be compared or assessed.”
“Verb: Evaluate or check (something) by comparison with a standard: ‘we are benchmarking our performance against external criteria’.”
In the independent insurance agency industry, we are very lucky to have a couple of excellent benchmarking studies to compare our agencies against. By “benchmarking” ourselves against our colleagues we can test ourselves to see whether what we are spending is reasonable, and whether our financial results are better, or worse, than our peers.
We can also use the standards of performance that these studies have to figure out where we can improve our own agencies, and to help us forecast what we need to do, and when, in order to grow.
In our retail insurance agency we have used the Independent Agents and Brokers of America’s “Best Practices” study and The National Alliance Research Academy’s “Growth and Performance Standards” publication since we started. It has been invaluable in answering, “How do you…” and guiding us in managing a profitable agency. We have been named an IIABA “Best Practices” agency for the last three years. There are 224 such agencies out of 37,500. Not bad!
These studies are available through OAA. As important to answering the “How do you…” questions, is the expertise to apply them.
Let’s “benchmark” our way to growth, profit and success. Together!