CIC AGENCY MANAGEMENT EXAM 2026
REVISION NOTES AND STRUCTURED
INSURANCE AGENCY LEADERSHIP OVERVIEW
GUIDE
◉ Factors that asses an agency's financial health. Answer: 1.
Profitability
2. Accounts Receivable - able to collect payments in a timely manner
3. Retention Ratio
4. Average commissions - Producer compensation structure - who
owns the book of business
5. Competencies of personnel - company markets
6. Brand - positive or negative image in the community
◉ Tools to measure agency financial health. Answer: 1. Budget
2. Income Statement
3. Balance Sheet
◉ Budget allows. Answer: an owner/management team to compare
monthly results to projected results
,◉ An income statement shows. Answer: an agency's revenues and
expenses over a period of time and can depict activity over a month,
quarter, or year
◉ Four income sources for an agency are:. Answer: 1. Commissions
2. Fee Income
3. Interest/Investment income - interest on agency investments &
premium trust account
4. Contingency Income - Tracking profit-sharing, premium
requirements, and monitoring losses and loss reserves
◉ Examples of Compensation Expenses. Answer: 1. Executive
Compensation
2. Sales salaries and commissions
3. Staff salaries
4. Employee Benefits
5. Payroll Taxes
6. Pension and Profit Sharing
◉ Examples of Selling Expenses. Answer: 1. Travel and
Entertainment
2. Advertising and Promotion
3. Automobile
,◉ Examples of Administrative Expenses. Answer: 1. Rent, Utilities,
leases, and postage
2. Accounting, legal, and other professional services
3. Automation and data processing
4. Education, licenses, and membership fees
5. Marketing/Advertising
◉ Determining Managing Expenses requires:. Answer: 1. Conducting
a situational analysis
2. Setting targets for future short and long term expenses
3. Establishing a budget
◉ Current Assets include. Answer: cash, accounts, receivables,
marketable securities, prepaid expenses within the next 12 months
◉ Long-Term Fixed assets include. Answer: tangible items such as
cars, desks, and office equipment
◉ Current liabilities include. Answer: accounts payables, accounts
current, payroll taxes, and notes payables within the next 12 months
, ◉ Long-Term liabilities. Answer: are payments due more than twelve
months into the future
◉ Shareholders Equity includes. Answer: original start-up capital
and earnings retained by the business
◉ Liquidity Ratios. Answer: help measure an agency's ability to pay
its obligations
◉ Common disruptors within an agency trigger a need for change.
Disruptors include. Answer: 1. Mergers and Acquisitions
2. Change in personnel, ex. key personnel
3. Creation of new profit centers
4. Restructuring and/or expanding
5. Technology Changes
6. Loss of a significant account
◉ The 4 steps in planning for change. Answer: 1. Planning
2. Communicate
3. Implement
4. Evaluate. Adjust. Maintain
REVISION NOTES AND STRUCTURED
INSURANCE AGENCY LEADERSHIP OVERVIEW
GUIDE
◉ Factors that asses an agency's financial health. Answer: 1.
Profitability
2. Accounts Receivable - able to collect payments in a timely manner
3. Retention Ratio
4. Average commissions - Producer compensation structure - who
owns the book of business
5. Competencies of personnel - company markets
6. Brand - positive or negative image in the community
◉ Tools to measure agency financial health. Answer: 1. Budget
2. Income Statement
3. Balance Sheet
◉ Budget allows. Answer: an owner/management team to compare
monthly results to projected results
,◉ An income statement shows. Answer: an agency's revenues and
expenses over a period of time and can depict activity over a month,
quarter, or year
◉ Four income sources for an agency are:. Answer: 1. Commissions
2. Fee Income
3. Interest/Investment income - interest on agency investments &
premium trust account
4. Contingency Income - Tracking profit-sharing, premium
requirements, and monitoring losses and loss reserves
◉ Examples of Compensation Expenses. Answer: 1. Executive
Compensation
2. Sales salaries and commissions
3. Staff salaries
4. Employee Benefits
5. Payroll Taxes
6. Pension and Profit Sharing
◉ Examples of Selling Expenses. Answer: 1. Travel and
Entertainment
2. Advertising and Promotion
3. Automobile
,◉ Examples of Administrative Expenses. Answer: 1. Rent, Utilities,
leases, and postage
2. Accounting, legal, and other professional services
3. Automation and data processing
4. Education, licenses, and membership fees
5. Marketing/Advertising
◉ Determining Managing Expenses requires:. Answer: 1. Conducting
a situational analysis
2. Setting targets for future short and long term expenses
3. Establishing a budget
◉ Current Assets include. Answer: cash, accounts, receivables,
marketable securities, prepaid expenses within the next 12 months
◉ Long-Term Fixed assets include. Answer: tangible items such as
cars, desks, and office equipment
◉ Current liabilities include. Answer: accounts payables, accounts
current, payroll taxes, and notes payables within the next 12 months
, ◉ Long-Term liabilities. Answer: are payments due more than twelve
months into the future
◉ Shareholders Equity includes. Answer: original start-up capital
and earnings retained by the business
◉ Liquidity Ratios. Answer: help measure an agency's ability to pay
its obligations
◉ Common disruptors within an agency trigger a need for change.
Disruptors include. Answer: 1. Mergers and Acquisitions
2. Change in personnel, ex. key personnel
3. Creation of new profit centers
4. Restructuring and/or expanding
5. Technology Changes
6. Loss of a significant account
◉ The 4 steps in planning for change. Answer: 1. Planning
2. Communicate
3. Implement
4. Evaluate. Adjust. Maintain
