Insurance agency owners identified account retention as the most critical factor affecting the ongoing value of their agencies, according to a recent survey by The National Alliance Research Academy.
More than 200 agencies responded to the online survey, rating 38 factors affecting their agency's value as an ongoing business. Rankings were on a 1 to 5 scale, with 5 defined as having a “critical impact on agency value.”
The top five were:
- Account retention (percent of all accounts renewed annually): 4.84
- Quality of personnel (all employees' dedication, knowledge and experience): 4.53
- Quality of customer service (efficient service by knowledgeable staff): 4.52
- Profit margin (total revenues minus total expenses): 4.47
- Public image (how an agency is viewed by clients, prospects and others): 4.45
Other highly ranked factors include account development (4.32), growth in new business (4.18) and product expertise (4.01).
At the bottom of the list were elements like physical location (3.35), organization type (2.72) and fee income (2.58).
Agency owners were also asked to rank the most challenging and most rewarding aspects of their jobs on the same scale. The top five challenges were:
- Finding and training new products: 4.02
- Achieving agency growth objectives: 3.49
- Establising personnel for perpetuation the agency: 3.45
- Achieving profit objectives: 3.40
- Instilling a sales culture throughout the agency: 3.38.
The top five most rewarding aspects of agency ownership were:
- Growing the agency: 4.43
- Helping clients with their financial needs: 4.38
- Achieving agency profit goals: 4.29
- Making a positive contribution to the community: 4.21
- Earning high income: 4.07.
To purchase a complete copy of the study, go to TheNationalAlliance.com/publications.
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