Florida's double-digit unemployment rate, failing propertymarket, bank closings, and generally anemic economy have putsignificant strains on the business community and, ultimately, theinsurance industry. This is the “trickle-down” theory at its mostegregious. As one of the interviewees for this article noted, “Theissue is not new business. It is the existing commercial book thatis shrinking because of fewer employees, fewer gross receipts,smaller inventories and fewer vehicles. We are a reflection of ourcustomers.”

These hard economic realities have pushed insurance agencies toimprove operational efficiencies and search for new avenues togenerate revenue. To gain a real-world perspective of how Florida'sagencies are faring, we asked four local insurance executives toshare their successes and challenges. Providing insight into howthey manage their offices' income, outgo, and upkeep are: TinaBlackwell Romaine, chief operating officer of Blackwell InsuranceAgency, Panama City; John Hosey, president of Caton-Hosey Insurance, PortOrange; Ted Ostrander Jr., president and chief executive officer ofLassiter WareInsurance, Leesburg; and Joe Perry, president of J.P. Perry Insurance, Jacksonville. What are the biggest challengesfacing your agency today?
Blackwell Romaine: The economic downturn. It hascaused many of our customers to close their businesses, slowed newconstruction, and drastically reduced new business ventures.Business itself is a cycle. You have highs and you have lows andyou have hard markets and you have soft markets. My father (whostarted the agency in 1972) always stressed that when times aregood you work hard and when times are tough you work hard. You needto keep it even. You cannot have high highs and you cannot have lowlows. You just need to keep moving forward.

Hosey: One of our biggest challenges isinsureds moving back and forth. Consumers are shopping. We arefinding —especially in some of the mid-market business—that peopleare making decisions based on premium and not necessarilycoverages. We need to get insureds to look at the products they arebuying and to assess the stability of the carriers involved. Wewant to make sure people understand what they are buying and whatcoverages they have. If a catastrophic event occurs, we don't wantour clients to find out they don't have certain coverages, or thatthey have incurred huge out-of-pocket expenses because theyselected a large wind deductible to get the lowest premium.

Ostrander: We have done the things we needed tointernally—such as adjusting our staffing level and our producerrequirements—in response to the marketplace, but the externalforces are still driving a lot of the issues our agency faces.Although I think the market has pretty much leveled out, we need tosee some growth in Florida's economy.

Perry: Oddly enough, in the last several yearswe have had a couple of the best new-business years we have everhad. The issue is not new business. It is the existing commercialbook that is shrinking because of fewer employees, fewer grossreceipts, smaller inventories and fewer vehicles. We are areflection of our customers. How areyou managing customer retention and service?
Hosey: We are trying to touch our small-to-midmarket clients, as well as our personal lines clients, more that wedid in the past. Automation is allowing us do that. We have ongoingcommunications with customers through newsletters and email blasts.We consider this a soft-sell approach.

Blackwell Romaine: Customer retention andcustomer service is our No. 1 goal. We want to continue to keepcustomers happy and create a strong referral stream. We reviewcustomer programs every year and market insurance placements toensure that our customers continue to get the best value. We alsoare proactive with our customers when they have claims. If you takecare of your customers during the claims process, they don't forgetit.

Perry: We have kept our customer service staffat the same level since 2007, and we think that has helped usremain successful. We consider customer service the “face of theagency.” Earlier this year, we hosted our first-ever customerappreciation lunch at our office. It was a huge success, and weplan to hold these quarterly going forward. Following the event, Ireceived emails from insureds telling me how much it meant to themto be invited. This isn't structured as a lunch-and-learn program.It is just our way of saying, “Thank you and we appreciate youbeing our customer.”

Ostrander: We focus on providing servicesoutside the normal routine for an insurance agency. For example, wehave a full-time HR professional who will conduct a human resourceaudit for a client, review policies and procedures, and do justabout anything related to HR processes. Additionally, we have acommunications person who is dedicated to sending out informationto our clients on important issues in the insurance world, such asthe impact of the new health care legislation. We also have aclaims person who will literally go to mediations with our clients.He is an advocate for our clients with the insurance companies.Sometimes, insurance companies and our clients aren't on the samepage because they don't talk the same language. Our claims expertcan intervene and be the middle man. He spends a lot of time withthe adjustors, working with them to make sure the process isflowing well. This helps the client from the standpoint ofproducing a satisfactory payout, and also helps to keep goodrelationships strong. What have beenyour most effective strategies for increasingrevenue?
Perry: We recently bought all of our producersiPads so they could integrate those into their day-to-day businessfunctions. They also use them to better serve customers when theyare out in the field. From a marketing standpoint, we are makingeven larger investments in advertising now than we were before. Weare advertising on the No. 1 news/talk radio station inJacksonville and we also do zoned cable TV buys where we can focuson areas where we want to target business. This generates newbusiness and helps with retention by reinforcing to insureds thatthey made a good decision by placing their business with us. I alsothink that a continuous, steady stream of marketing from a namerecognition standpoint is really important. It helps us in bothpersonal lines and commercial lines.

Ostrander: We are doing a lot morecross-selling. For every piece of business we lose, we send out acard to the client letting him or her know we are sorry that welost the business and asking if there something we can dodifferently. We also use Zoomerang to conduct client surveys tofind out what our clients feel about us and our products and whatthey are looking for from our agents. Our main goal is to refocusour producers on bringing value to the client. We want the clientto understand the value that we add. The market in Florida was onan upswing for so long that you didn't have to be the sharpestagent in the world and you could still write quite a lot ofbusiness. That's changed. So now it is back to basics—a lot ofblocking and tackling.

Hosey: The modern consumers live on theiriPhones and iPads or whatever mobile devices they might use. We aretrying to reach people through these vehicles. Our agency is veryactive in social media.  We have been pretty successful ingenerating referrals and leads through these mediums.

Blackwell Romaine: Our strategy to increaseagency revenue is just to increase policy count. Our number onesource of business is referral. We do a good job for our customersand they tell their friends. We support our efforts with a brandingcampaign using various advertising mediums. What initiatives have you introducedto improve internaloperations?
Ostrander: We use one location address for allfive of our offices throughout North Central Florida. We scan everypiece of mail that arrives and it gets sent to the account managersat our various offices. Our phone system is also connected to alllocations so we can have one receptionist handle multiple offices.Our agency's intranet contains a lot of valuable data for ouremployees. We also have what we call the green screen. It flashesup anytime somebody writes a nice account.

Blackwell Romaine: The most effective procedurewe have implemented is a 30-minute monthly office meeting beforethe office opens. We have a standing agenda that includes marketupdates, changes in carrier appetite, changes in carrier coverageforms, any lessons learned from anyone in the office from thatmonth and success stories—where we are having success and withwhom. We read every customer compliment we received during themonth out loud. We discuss any open items. And we give everybody anupdate on how the agency is doing compared to that month the yearbefore and that month two years prior. I believe continuouscommunication within the agency creates an environment that iseffective for collaboration. I think that any kind of lessonlearned should be shared and implemented in a positive way for thefuture.

Hosey: We are using automation to measure ourresults and to improve them on a daily and weekly basis. We measureeverything we do from where and when the sale begins all the waythrough the processing on the back end. Going paperless has beenhuge for us. Automation has allowed us to do all of this measuringbecause we now have access to all the necessary data. Ourmeasurement process eliminates the mystery of where people are ontheir workloads and backlogs and how much commission, premium andaccounts they have. We have this information at our fingertips andare able to manage the agency more efficiently. Have you made any upgrades to youragency managementsystem?
Perry: We upgraded allof our servers and moved to the latest version of our agency systemsoftware, AMS 360, last fall. We plan to go to front-end scanningsoon, which will make us even more paperless.

Blackwell Romaine: With agency managementsystems, this is truly an independent business. We all have aconstant development opportunity to maintain and upkeep oursystems. I don't think there is any dead-on key solution there. Wehave an agency management system that we use to communicate withinthe office and to keep track of where we are with our customers asfar as anything going on with the policies, but we keep paper filesas well.

Hosey: We just completed a bridge between AMSand Astonish Results (the agency's website host that also providesback side measuring tools) where we can transfer data back andforth instead of having two separate systems. We can now integrateour sales tracking system and our agency management system, whereall of our insurance data is housed. We can move data back andforth, which is going to be huge for us. That's probably thebiggest thing that has happened at our agency in terms ofautomation, besides going paperless a few years ago. We also havethree monitors on everyone's desk to help our people operate asefficiently as possible.

Ostrander: We are in the process of moving toAMS 360. We were doing scanning on the back-end; now we do it onthe front-end. That has been very beneficial, as the informationnow goes directly into the account managers' file cabinet. We canalso monitor everybody's file cabinet to determine what theircurrent workload is. It gives us some real flexibility in managingworkflow. How are you controllingexpenses? 
Blackwell Romaine: We review every single expensefor the month, every single dollar. Business is pretty simple whenyou look at it from a high-level perspective. What do you havecoming in and what do you have going out? It is so important tostay on top of it every month and track it year-over-year.

Ostrander: From 2005 through 2007, we weregrowing at 15-20 percent a year. We were staffing to that model. Wewere staffing ahead of what we needed because we were growing intoit. When the market changed, we had to step back and say, “Do weneed all of these people?” Compensation expense is the largestexpense in the agency. We were able to reduce staff somewhat inreaction to the market. We have looked at every expense and gonethrough every line item, asking ourselves, “Does this make sense?Do we still need to do this? What is the cost against the benefit?”By answering these questions we have reduced expenses fairlydramatically, and done so without jeopardizing any of the serviceswe offer our clients.

Have you implemented any new employee trainingprograms?
Perry: We recentlyimplemented a producer apprentice program by hiring someone with noproducer experience, even though he did have two years of claimsexperience at a carrier. We are going to send him to a three-weekschool Travelers is conducting for commercial insurance. When hecompletes that, we have a program established where he will workwith our other producers and be mentored with the goal of beingable to venture out on his own by the end of this year.

Ostrander: We recently hired a businessdevelopment person to strictly focus on targeting larger accounts.We use one of our producers to close and manage these accounts. Thelast two producers we hired strictly for their sales ability, notfor their insurance skills. Neither one of them had ever been inthe insurance business. We are training them on insurance and areusing an experienced producer to mentor them. We are pretty pleasedwith the results of this strategy.