Last week we ran a story on what insurance agency owners consider the most important factors affecting the value of their businesses.
The top 10 factors, based on a scale from 1 (least critical) to 5 (most critical), according to agents, were:
- Account retention (percent of all accounts renewed annually): 4.84 average
- 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
- Account development (cross selling): 4.32
- E&O experience: 4.24
- Company markets: 4.22
- Employee productivity: 4.22
- Growth in new business: 4.18
As an outsider looking in, I was surprised to find that account retention–rather than new business–was the driving force.
Wondering if this is a new development tied to more challenging economic times, I spoke with Jim Cuprisin, research director at the National Alliance for Insurance Education & Research, which conducted the study.
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