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Marshberry - CounterPoint

 August 2017 Edition

PRODUCER TO PLATFORM: THE RISE OF SALES & CONSULTING
Many top performing firms already understand how the service model with true trusted adviser resources can help elevate new business production, long-term retention, remarketing inefficiency drains, and establish long-term client commitment.

Carriers are continuing to tweak their distribution models in some markets, in some lines, carrier to broker compensation has dramatically changed.

We are seeing that the individual benefits marketplace is no longer a focus for the traditional employee benefits firm and those writing a large amount in small employer groups have lost value. Human capital management consulting and technology are constant strategic initiatives for customers of all shapes and sizes as they are looking to you as a resource. Compliance has taken firms to a whole new level in terms of capabilities. It appears that having on-staff analytics professionals is becoming the norm. 

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ALSO HIGHLIGHTED

Feature Article: Producer to Platform - The Rise of Sales & Consulting
State of the EB M&A Market
New Business: The Big Difference Between the Best and the Rest
"9 Things" We Think Your Agency Should Focus on in the Second Half of 2017
Metric of the Month: Life & Health Production Payroll
Peer Exchange Network News

 


 
July 2017 Edition

WHAT'S NEXT? AN ALTERNATIVE PERPETUATION PLAN 
The iCAP plan for continuity alignment considers culture and incentives combined with both internal and external funding to help make perpetuation a reality. 

We talk to agency owners about "what's next?" for their business, and many have a strong desire to perpetuate internally. After decades of commitment to growing their firm, there is often the hope to carry on the legacy and transfer ownership to family members or key employees. But, for various reasons, perpetuation is not a viable option for many agency owners and they likely will ultimately end up selling. Ideally, we believe that every agency should have a choice of whether to carry on its legacy by perpetuating internally or selling externally to a third-party buyer.

What is the iCAP solution? iCAP is a MarshBerry product that helps enable internal long-term perpetuation. 

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ALSO HIGHLIGHTED

Feature Article: An Alternative Perpetuation Plan 
Consolidation in the Insurance Industry 
What Makes an Insurance Distributor "Special"?
Addressing the Non-Performing....Partner?
Seven Ways to Actually Grow Organically
Metric of the Month: Stock Ownership Opportunities 
Peer Exchange Network News

 
May 2017 Edition

HIRING PRODUCERS? TRY LOOKING OUTSIDE
Your best producer candidates could be employed today in a different type of business all together. Here are three effective recruiting strategies for filtering through the job-seeker pool and finding people who can drive organic growth at your agency.

Rather than limit yourself to a pool of existing producer candidates - branch out.

LOOK BEYOND THE INSURANCE INDUSTRY.

Wanted: Someone who’s personable, driven and goal-oriented. Must work well under pressure and be willing to take risks. Helps to have a “hunter” mentality — comfortable cold-calling prospects, and building relationships from scratch. Qualities should include self-discipline, persistence, resilience and grit.

The job description here includes characteristics of a successful producer in the insurance industry. But notice, the words “insurance experience” are missing, and that’s not by mistake.

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ALSO HIGHLIGHTED

Feature Article: Hiring Producers?
How Do You Keep Your Deal Alive?
The Importance of a Defined Sales Process
How Can We Make Insurance Sexy?
Wait. See. Partner
Metric of the Month: Employee Leverage
Peer Exchange Network News: Pinnacle & PIN Up Award Winners


April 2017 Edition

2017 M&A OUTLOOK: WHAT LIES BENEATH
What appears simple and serene on the surface might not be. Let’s examine what lies beneath the surface in today’s M&A market and what to expect in 2017.

The M&A Market may appear to be calm, but beneath the stable deal flow is a churn resulting from several variables.

The market is currently stable and we see that continuing during the next ten years; in fact, deal flow in this period is expected to outpace that of the previous decade, and this presents opportunities for buyers and sellers. Demand from buyers is high, with incumbent players and new entrants setting aggressive acquisition goals. They’re looking to grow by tapping this supple Merger & Acquisition (M&A) market, and the strategy seems to be working.

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ALSO HIGHLIGHTED
Feature Article: 2017 M&A Outlook
2016 Employee Benefit Transactions
Run Your Agency Like You're Selling It - Even If You're Not
Agency Spotlight: The Graham Company
Metric of the Month: Impact of Acquisitions on Revenue Growth
Peer Exchange Network News

MarshBerry Partners with Leader's Edge Magazine on 2016 M&A Annual Report

The 2016 Leader's Edge Executive Report: Strategic Pairings – 2017 Broker M&A Market is now available!

This supplement to the April edition of the Leader’s Edge magazine was written by MarshBerry and provides a comprehensive look at perpetuation strategies, Merger & Acquisition (M&A) activity, and an outlook for the future.

Click here to view the online edition now!

March 2017 Edition

YOUR GAME PLAN FOR GROWTH
Combine a simple, time-tested strategy, talented team and the commitment to execute the plan, and you’ve got a winning play. In the games of business and football, getting ahead is all about blocking and tackling.

You can devise complex strategies to outsmart competitors. But basic strategies that are well played deliver results.

What happens when we get too fancy? We fumble. We become so focused on a certain “move” that we lose sight of the game going on around us. Our teams get frustrated, morale deflates. A culture that lacks drive will not set any records.

Simple strategy. Talented team. Commitment to execute.

As with any industry, there are insurance professionals who promote philosophies to boost growth, attract the best producers, make your firm more attractive to private equity — whatever the goal. But at the end of the day, there’s no secret to getting ahead, growing organically or perpetuating your business.

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ALSO HIGHLIGHTED
Feature Article: Your Game Plan for Growth
MarshBerry 360 Preview
2016 Insurance Agency Transaction Multiples
Agency Spotlight: Alera Group, Inc.
Metric of the Month: Impact of Unvalidated Producers
Agency Data: Know your Stats
Broker Tear Sheet & Quarterly Q&A with John Wepler


February 2017 Edition

USING DATA TO OPTIMIZE FORESIGHT
The 2017 MarshBerry Retail Market and Financial Outlook Report uncovers talent as a top concern for growth, and technology as a tool for recruiting, engaging and retaining the next generation.

Technology is the key to unlocking some of the greatest challenges agencies face in our industry today.

Technology can help us tap into fresh, inspired talent. It can provide performance metrics so employees understand what’s next in their careers, so they recognize where they stand and how they can make a positive impact on the business. And, we know that this is something that Millennials value.

There’s a beneficial synergy between data and relationships that can give agencies a competitive advantage as they face today’s greatest industry challenges: talent acquisition, government regulation and technology. These findings come from MarshBerry’s annual Retail Market & Financial Outlook Report, a comprehensive study of external and internal factors impacting the insurance environment.

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ALSO HIGHLIGHTED
Feature Article:  Using Data to Optimize Foresight
Mergers & Acquisitions Update
What it Takes to Double in Revenue
Metric of the Month: Impact of Service Staff
2017 MarshBerry Events

 

December 2016/January 2017 Edition

THE HOLLOW PERPETUATION PROMISE
Are you willing to fight to make the promise of internal perpetuation a reality?

According to MarshBerry’s proprietary database, and other publicly available databases, more than 3,000 insurance agencies have sold over the past ten years. MarshBerry advised on more than 400 of these deals, or an average of three per month.

Given our experience, we believe that we know better than anyone why agency owners choose to sell.

While some of the continued consolidation reflects those taking advantage of opportunity or those suffering despair, many times consolidation can be blamed on leadership throwing in the towel given an awareness that perpetuation is not possible.

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ALSO HIGHLIGHTED
Feature Article:  The Hollow Perpetuation Promise
Don't Let Taxes Drive How You Run Your Business
Talent, Culture & Technology: Peer Exchange Networks Year in Review
Broker Tear Sheet + Quarter in Review
Metric of the Month: Driving New Business

 

Season's Greetings from John Wepler

During my time off, it struck me how lucky and thankful I am for the life that our clients and this industry has provided for my family. I realize how much we all have to be thankful for and that we are the fortunate ones. However, there are many that need help. I am writing to ask for your financial support in this time of giving.

Read the December/January CounterPoint by John Wepler, Chairman & CEO of MarshBerry, and see how you can support the Insurance Industry Charitable Foundation through their 2017 Blazing the Trail Benefit.

2017 Blazing the Trail Benefit

November Edition 2016

PRIVATE EQUITY BUYERS: WHO, WHAT & WHY?
How do PE firms differ from other buyers and how can you try to position yourself to attract their interest? 

The buy-sell environment in the insurance distribution industry has changed a lot in the past decade.

We believe the biggest reason for this may be the emergence of private equity (PE) firms into the space.

In fact, last year, nearly half of agency transactions in the U.S. involved PE firms in one way or another. This is up from almost nothing, historically.

In our expertise, pricing has never been higher — with PE firms being aggressive buyers. How can they afford to pay these prices? What has happened to change things, and what should you know about these firms? In the face of such a “sea of change” in the marketplace you may want to find out more about these firms and how they operate. Chances are, even if you are not looking to sell currently, a number of your closest competitors may soon be under their control — one way or another!

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ALSO HIGHLIGHTED
Feature Article:  Private Equity Buyers
Value Creation in Private Equity
The Secret Sauce: Private Equity's Growing Interest in Insurance Distribution
Metric of the Month: Private Equity in Today's Market


October Edition 2016

SWEATING IT IN THE POLITICAL HEAT
The 2016 presidential election is firing up uncertainty among business owners - what's your business platform for success?

The political boxing ring this election year is dynamic and high-stakes with two party contenders duking it out in a highly divisive match.  Come Election Day, a lot of Americans will simply breathe a sigh of relief that the contest is over. Presidential elections — especially this one — create a cloud of uncertainty. What does it mean if Clinton is elected? How would Trump as president impact the way we live and do business?

Can we really answer these questions? Going back to the old “information is power” mantra, we believe the best way to dissipate uncertainty is to understand each party’s platform and how their proposed policies and overall visions could impact the insurance industry.

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ALSO HIGHLIGHTED
Feature Article:  Sweating It in the Political Heat
Political Perspectives:  Views on the Presidential Political Arena  What You Should Know - Clinton vs. Trump
The Presidential Election and the Stock Market
Metric of the Month: Party Lines


September Edition 2016

GROWTH VIA ACQUISITION
Stay disciplined and avoid the "upward spiral." 

The competition is fierce — don’t get frustrated with the process and feel the need to stretch beyond your comfort zone in negotiating a deal.

We believe that the number of buyers looking for quality agencies is at an all-time high.

Based on our experience, the industry has never witnessed a time when pricing, terms and structures have been more favorable for a selling agency. It is easy to see how an independent agency with a strategy to grow via acquisition could get frustrated with the process and feel the need to stretch beyond its comfort zone in negotiating a deal. An acquisition strategy requires a delicate balance between both flexibility and discipline to be successful.

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ALSO HIGHLIGHTED
Feature Article:  Growth via Acquisition
Where Are You Going? Answering the Question with Analytics
Platform Agencies Generating Better Returns
Metric of the Month: Impact of Owner Age on EBITDA Margin
Broker Tear Sheet


August Edition 2016

The Value Equation
If growth is your plan, it's time to get to the foundation of what actually drives value.

Is growth on your agenda? In the next five years, do you envision running an agency that’s double the size of what you’re operating today?  Do you want a business that will fund your retirement—that you can sell at a premium come time for transition? Do you hope to build a legacy that will perpetuate?

If you answered yes to any of these questions, then now is the time to focus on what matters to increase the value of your agency.

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ALSO HIGHLIGHTED
Feature Article:  The Value Equation
The Value of Trading Down Small Accounts
Platform Agencies Generating Better Returns
Metric of the Month: Average Account Size


July Edition 2016

Growing up in today's market
With a hot M&A market, acquiring growth has become an attractive option for many firms but 'merging' revenue into your business should not replace organic growth.

Healthy, progressive firms in the insurance industry recognize that they can achieve growth in two ways.

 Agencies can increase the amount of new business they write, or they can “buy” that new business by acquiring another firm. There’s a balance to strike between the two strategies — but the 2015 Merger & Acquisition (M&A) market is a clear indication that many agencies are looking seriously at acquisition.

READ MORE

ALSO HIGHLIGHTED

Feature Article:  Growing Up in Today's Market
Protecting Your Investment in an M&A Transaction
Growth vs. Profit in Employee Benefit Firms
Metric of the Month: Calculating & Driving Organic Growth
Postscript - A Supplement to CounterPoint:  Happy Little Trees  


June Edition 2016

SALES & TECHNOLOGY: HOW TO CONQUER THE NUMBERS GAME
Using technology to help your agency reach peak performance.

Your goal is to increase the agency's annual sales - so you set revenue targets and monitor expenses.

The idea is to see the revenue climb and control the costs. So you watch those two numbers and producers are given their goals.

The problem is, come year-end, there’s a surprising gap between what the agency (and each producer) wanted and what was actually produced. Perhaps sales are up, but the numbers still don’t meet your goal. Maybe sales are stagnant, but retention remained high. No big wins, but no major losses either.

Does this scenario sound familiar?

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ALSO HIGHLIGHTED

Feature Article:  Sales & Technology: How to Conquer the Numbers Game
Technology in Recruiting
Impact of Technology on a Transaction
Metric of the Month: Investments in Technology
The Broker Tear Sheet
Quarter in Review with John Wepler


May Edition 2016

PRODUCER COMPENSATION: BEHIND THE NUMBERS
"How should we pay our producers?" The answer to this important question is not always simple.
 

40. 25.
The first two numbers you learn at MarshBerry: 40/25.

Why? Because it’s the answer to a vitally important and commonly asked question by leaders all over the country… “How should we pay our producers?”

For decades “40% on new and 25% on renewal” was the simple, short and direct answer to the question posed above. As the industry has evolved, roles and responsibilities have changed and technology has altered the way firms do business — so must producer compensation. Few agencies adapt their business model and corresponding compensation to adequately align with the long-term plan.

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ALSO HIGHLIGHTED

Feature Article:  Producer Compensation - Behind the Numbers
Service Staff - "Gain & Pain"
Executive Compensation
Metric of the Month: Total Commissions & Fees Per Service Person


April Edition 2016

TRANSFORM YOUR BUSINESS
MarshBerry opens eyes to a different kind of agency with a 360° approach to transformational change.

We hear this story almost every day from agency owners: They believed they were on the right track, until they realized they weren’t.

They thought they were successful because their firms had been around for decades, or because they continued to secure new business and retain longtime clients. They figured they were a healthy organization because their numbers were steady.

MarshBerry opens their eyes to a different kind of agency: One that is attracting aggressive, young producers and diving deep into niches—a firm that is implementing technology that empowers producers. A culture that is dynamic and includes diversity—age stratification so perpetuation is a reality. Then a light turns on. 

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ALSO HIGHLIGHTED

Feature Article:  Transform Your Business
Avoid a Closing Crunch
Process Makes Perfect: Consistent Hiring Approach
Metric of the Month: Driving Profitability Through Executive & Management Compensation
Broker Tear Sheet Quarter in Review Q&A with John Wepler


March Edition 2016

THE HIRING MINDSET
Agencies can achieve organic growth and perpetuation when they adopt an "always hiring" mentality and focus on recruiting people with the "selling gene."

Finding talent is tough. Without a plan to recruit, reward and retain employees, organizations will struggle to attract and keep professionals.  

We know that hiring is more of a priority than ever before with 75% of agencies planning to increase production staff by an average of 8% in 2016—that’s nearly double of prior years, based on the MarshBerry 2015 Organic Growth Trends Report.

Agencies that adopt an “always hiring” mentality and commit to basic recruiting disciplines, stand the best chance for industry leading organic growth. This is very timely as many firms are looking for organic growth now more than ever.

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ALSO HIGHLIGHTED
Feature Article:  The Hiring Mindset
Moneyball vs. Eyeball: The Chase for Recruiting
High Performing New Producers
2015 Insurance Agency Transaction Multiples
Metric of the Month: Employee Marginal Profitability


February Edition 2016

Taking Stock:  People & Technology Propel Progressive Firms
MarshBerry’s 30th Annual Market & Financial Outlook report addresses top challenges insurance agencies face — talent, market dynamics and technology.

Renewal income provides comfort for many traditional insurance agencies. Most are happy if agency growth outpaces inflation and provides adequate shareholder return. Those agencies tend to “go with the flow” in terms of growth. They continue to operate their firm as they always have, rising and falling with the market and with no real significant investments in technology or assertive recruiting efforts.

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ALSO HIGHLIGHTED

Feature Article:  Taking Stock
The Rise of Private Equity-Backed Buyers
The Mechanism That Drives a Small Business Unit
Metric of the Month: Non-Compensation Expenses 


December/January Edition 2015-2016

WHAT IS IT WORTH?
Strategy is the game changer in valuation - is your agency driving a hard bargain?

Today’s dynamic insurance market is ripe with buyers chasing opportunities to acquire agencies, inspiring some owners to ask the question: What’s my business worth, anyway?

With a virtual feeding frenzy of private equity buying into the insurance space, some agency owners wonder if now is the time to sell. And, seeing the prices those buyers might pay push up higher than in the past, now certainly seems like an ideal time to cash out if that’s the succession plan. You might be wondering: Could my agency fetch an attractive price like that?

READ MORE

ALSO HIGHLIGHTED

Letter from John Wepler, Chairman & CEO
Feature Article:  What Is It Worth?
The Boom of the 2015 M&A Market
The Importance of Getting it Right
Metric of the Month: Ten Year Stock Investment Return
Insurance Business America Names MarshBerry "Best of the Best' 2015


November Edition 2015

ALL EYES WILL BE ON YOU
How bad will the valuation hangover be when the party is over?


You know that I know, that I know that you know that the valuation party will end. Even if the vast majority of people conveniently choose to ignore it and not talk about it.

According to our proprietary data, valuations for “high quality” firms have escalated to the highest level on record. In today’s market, it almost seems like a bad deal is better than no deal from the typical buyer’s vantage point. The question is not, if valuations will correct - but when, how fast and how far they will drop.

READ MORE

ALSO HIGHLIGHTED

Letter from John Wepler, Chairman & CEO
Feature Article:  All Eyes Will Be On You
Bucking the Trend Line
Purchase Price Structure Metric of the Month
Business Insurance Women to Watch: Valerie DeMell


October Edition 2015

WHAT IS THE "RIGHT" STRATEGY FOR YOUR FIRM?
The acquisition market is hot - MGAs looking to expand or planning an exit should focus on maximizing values.


There is significant consolidation going on in the Specialty Insurance Distribution space. Based on current market conditions, we believe this trend should continue for the foreseeable future.

READ MORE

ALSO HIGHLIGHTED
Letter from John Wepler, Chairman & CEO
Feature Article:  What is the "Right" Strategy for Your Firm?
What do Retail Agents Want From Their Specialty Distributor?
Metric of the Month: A Moderating Rate Cycle
Increasing Interest in Wholesale Brokers 

September Edition 2015

SO, YOU WANT TO BE AN OWNER?
Successful perpetuation calls for high-performers who desire ownership.  How can emerging leaders prepare?


Am I ever going to have an opportunity to buy stock?  Why hasn't the owner asked me to be a shareholder yet? Is the owner ever going to perpetuate this agency?

The younger generation routinely asks these questions and too often are unable to get answers.

READ MORE

ALSO HIGHLIGHTED
Letter from John Wepler, Chairman & CEO
Feature Article:  So, You Want to Be an Owner?
Urgency for Emerging Leaders
Metric of the Month: Weighted Average Owner Age
Internal Perpetuation Options
Quarter in Review Q&A and The Broker Tear Sheet

August Edition 2015

CAN YOU REALLY ACQUIRE GROWTH?
It's time to take a good, hard look at your sales process - create a detailed roadmap that will guide you toward true growth.

So you just closed on an acquisition of another agency…It’s a real win because it increases the size of your organization and brings in several new producers. Instant growth—a shot of revenue in the arm of a firm looking to accomplish an aggressive revenue goal. Victory! Or is it?

READ MORE

ALSO HIGHLIGHTED
Letter from John Wepler, Chairman & CEO
Feature Article:  Can You Really Acquire Growth?
How Do Your Commission Percentages Compare?
Metric of the Month: Organic & Acquired Growth
M&A - Growth Perspective

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