Regional Insurance Agency Case Study

Executive Summary

This insurance agency has had minimum or no growth for the past few years. The founder and sole owner wants it to grow organically at least 12% annually. It has 60 employees, and attracting new talent and retaining its top talent has been difficult. Private equity has approached the owner, but the offers were too low. He wants to create a more dynamic, successful, and coveted agency that will be more highly valued within the next five years.

The agency’s revenue is 25% personal lines, and the remainder is commercial. They have strong relationships with their most important carriers and regularly obtain their contingencies. The owner knows that referrals are a much less expensive way to get new business but has found resistance from many Producers. He also knows that most clients have not been fully cross-sold and that the likelihood of leaving diminishes to the single digits when a client is fully cross-sold. Thus, he knows cross-sales is a key sales method to increase the revenue per client.

Challenges

  • To retain current top talent to ensure the agency accelerates its growth to be an attractive agency to sell in five years.
  • To have almost all clients be cross-sold to drive the value of each client to approximately 2X their current value.
  • To non-renew problem clients so employees have more time to spend with top clients.
  • To have all employees obtain 75%+ of new business through referrals.
  • Have all employees know how to win back former profitable clients and annually win back at least five.
  • To uncover precisely why employees joined the firm, stayed with, and would leave.
  • To know what the agency needs to offer to retain and attract top talent.
  • To create an engaging, vibrant, and connecting culture.

Action Implemented

  • All employees took a couple of assessments to identify their unique and excellent abilities, and thus to expect high productivity is reasonable. 
  • All Producers participated in a five-month training Program to learn how to ask for and win referrals and cross-sales effectively.
  • Thomas Consulting interviewed some of the firm’s former profitable clients to uncover why they left and how the firm could win them back.
  • The agency offered all employees generous bonuses commensurate with their efforts during this training and growth period.
  • Interviewed some employees and surveyed all to identify what attracted top talent to join, stay, and leave the agency.
  • The owner was willing to offer up to 10% of the agency’s value to the employees who acted like owners and had an entrepreneurial initiative.

Outcomes – ROI

  • Employee retention increased by 4%, and the owner successfully hired all of his top candidates. He was even successful in winning back three former highly successful agents.
  • The training Program was highly successful because it increased the employees’ confidence, experience, and skill levels. They worked much better as Team.
  • Everyone was elated with the generous bonuses and was more productive and happier.
  • Within a year, the agency won back over 10 former profitable clients through Thomas Consulting’s interviews and guidance. This increased the agency’s revenue by $2.3 million annually.
  • The agency’s organic growth skyrocketed in the first two years exceeding 18%.

Conclusion

We helped the agency to set a five-year growth plan, trained the employees with the skills they needed to win, cross-sell, and retain more high-quality business, provided a path of ownership for some key employees, and the founder was happier and delighted with the progress.