CIC Agency Management

CIC Agency Management Sales oriented - ANSWER Greater emphasis on sales and competition between employees Service oriented - ANSWER Greater emphasis on satisfying customer Large agencies - ANSWER More employees you have the less crucial each employee More flexibility with vacation and holidays Greater chance required to follow certain federal and state regulations Small agencies - ANSWER Employees play more critical roll Less flexible with time off and vacations Not subject to certain federal or state regulations Publicly traded - ANSWER Are subject to and must satisfy Wall Street Look more at short term goals Look at achieving higher rate of return than on employee satisfaction Privately held - ANSWER Does not have to satisfy Wall Street Can focus on long and short term goals More concern with keeping employees happy Explain the organizational structure available to insurance agencies? - ANSWER 1. Sales vs Service 2. Large vs Small 3. Public vs. Private Explain the impact of Federal and State regulations on agencies. - ANSWER 1. Licensing 2. Role of Federal and State regulators Licensing - ANSWER Is agency going to operate Single state Multi state Resident Non-resident Must know licensing requirements and regulations with multi state licensing Role of Federal and State regulators - ANSWER Regulators must Determine reason for regulation Monitor inter state commerce Protect consumers Maintain viable insurance marketplace Identify the characteristics of the five stages of agency growth and describe how when and why move from one stage to the other - ANSWER 1. Existence 2. Survival 3. Success 4. Take off 5. Maturity Existence - ANSWER A. Owner and agency are struggling to stay alive B. Must be creative to grow C. Has basic staffing needs D. Owners do everything Survival - ANSWER A. Agency has ongoing revenue and expense concerns B. To grow agency must have a specific direction C. Owner still heavily involved aspects but can delegate some sales and service activities Success - ANSWER Agency is profitable and can choose to 1. Remain stable at comfortable position and be Service oriented 2. Choose Growth and be more sales oriented Stable agency - ANSWER Owners/management can delegate more day to day sales and service activities Growth agency - ANSWER Owner/management may delegate some sales and service activities but will increase planning and strategy focus, may look at mergers and acquisitions and create a management team Take off - ANSWER The agency is expanding rapidly and targeting new market territories. It must carefully coordinate to continue growth and increase staff, money and people. Owners/management must delegate and develop ownership team with one voice. Maturity - ANSWER A developed and decentralized agency Emphasis is on building professional integrity These are the large national brokers and are focus on financials, strategic growth, planning, human resource development, and support systems Growing from one stage to another - ANSWER The owner or manager plays role in movement from one stage to the other. Agency can be in more than one stage and stage can vary by department. Agency owner and management must look at agency organization, financial analysis, human resource, productivity and effectiveness, sales and retention, and E&O exposure when considering moving from one stage to the other in order to reach maximum potential. Compare the various type of company markets available to agencies. - ANSWER 1. Standard Markets A. Stock B. Mutual C. Direct writers 2. Alternative Markets A. Excess and surplus lines B. Managing general agents MGA C. Brokerage agreements D. Self insurance funds SIF E. Captives F. Professional employer organization PEO Stock companies - ANSWER Carrier issues stock and shareholders expect dividends, growth, increase in stock price. Shareholde