What are your agent clients’ biggest challenges?
Phil Trem: Organic growth continues to be the biggest challenge for not only our clients but the industry in general. In many agencies, new business production is lagging and top line revenue growth is solely reliant upon the ebb and flow of the external marketplace. The rate environment, client exposure base movement, and retention end up being the key drivers that impact agency growth.
With limited capital, in what areas should agencies invest most heavily?
Trem: New production staff takes both money and time to develop but the return can be extremely lucrative. Organizations should consistently have approximately 3 percent of their net revenues tied up in unvalidated producer compensation.
What should agencies be doing with the Web and social media?
Cunningham: You don’t want to be on the bloody or cutting edge—you have to show some evidence so you’re not perceived as a Luddite, but I think the jury is still out in terms of what it means to use the Web and social media to communicate with clients and for new business development. The unknown is generational. Millennials significantly embrace the Web and social media on a level that older generations can’t truly appreciate.