Key executives at Aon and Marsh brokerages said that a key ingredient in putting their firms on a path to profitability has been a trimming and remolding of their sales forces to make them more dynamic.
Their comments came during the Association of Insurance and Financial Analysts Conference held earlier this week in Scottsdale, Ariz.
Since joining their respective firms, Daniel S. Glaser, chairman and chief executive officer of Marsh and Ted T. Devine, executive vice president of Aon Corp. and president of Aon Risk Services, said they have experienced significant changes, primarily winnowing staff and keeping personnel with an attitude that they say helps promote the sales culture.
When he arrived in 2007, Mr. Glaser said there were problems that needed to be addressed if the brokerage firm was going to grow. He said there are two sales mind sets; either you want to protect the castle or take the castle.
"We wanted to emphasize a culture that takes the castle," he said.
Joining Aon in 2005, Mr. Devine said he entered an environment that was inhabited with a sales culture that was not helpful to building the business.
"It was not a culture of team work," he explained, noting that many producers considered themselves independent from the company. "It was cool to be a cowboy."
Both executives said that since arriving a lot of changes have been made including eliminating employees who did not fit in with the new vision the executives had.
At Marsh, the firm eliminated 2,200 positions, said Mr. Glaser, but none of those cuts went into the muscle of the brokerage and not one account was lost because of it.
The results of these personnel changes, plus eliminating wasteful spending, produced a leaner process for doing business that was simpler to work with and made for happier customers, he said.
Mr. Devine described a similar situation at Aon where information was difficult to gather and opportunities lost because the organization could not optimize the opportunities presented by its disparate parts.
Today, he said, there is one global platform that gives access to thousands of opportunities and allows the sales staff to understand where those opportunities are.
Mr. Glaser said Marsh has moved away from centralized application of business process to regionalized servicing and placement of accounts. He said this process allows for greater competition among insurers and greater efficiency.
When asked about Marsh & McLennan Agencies, the new division designed to handle small and emerging business accounts, Mr. Glaser said it represents the "greatest growth potential in the short term."
He said the marketplace amounts to $30 billion in opportunity. The Marsh & McLennan Agencies will be run separate from Marsh and will grow primarily through agency acquisitions, he explained.
Mr. Devine, when asked about how Marsh & McLennan agencies and competition with Marsh and its parent company Marsh & McLennan Companies is affecting Aon, said both are great firms, but Aon is gaining ground on Marsh, though it still leads in large accounts.
He said Aon's acquisition philosophy will concentrate on finding niche spaces, adding, "We are not going to get big to get big."
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