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Today's Viewpoint: A MarshBerry Publication

The best firms in the industry look beyond their own results and seek to understand how they compare to peers and drive top performance. MarshBerry recommends focusing on five key areas for improving your firm – today.

  • Profitability: Finding the balance between growth and profitability of a firm is one of the largest challenges facing management and executive teams. Whether it includes setting an attainable budget, managing personnel or finding cost-cutting technology solutions, optimizing operations is a necessary — yet challenging — step in increasing a company’s bottom line. Cutting unnecessary costs should remain on the to-do list of every management team.
  • Perpetuation: As more independent firms take advantage of the friendly M&A market, those that choose to remain independent should assess the state of their firm’s ownership and ask themselves some tough questions. For instance, have you identified the next generation of leaders? Have you put a perpetuation plan in place? According to MarshBerry’s proprietary database, Perspectives for High Performance (PHP), 41% of independent ownership remains with Baby Boomers (1946-1964), while only 11% of ownership is held by Millennials (1981-1996). Firms that wish to be poised for the future need to identify the next generation of leadership and bring partners on board.
owner by generation
  • Growth: Firms typically identify multiple primary drivers of organic growth. Technology, value-added services, increased account size and others make the list for those drivers, but some strategies are consistently top ranked on the list. Producer training, management and hiring — in addition to new business prospecting and closing efficiency — have remained in the top three reported growth drivers for the past four years according to MarshBerry research. Increased account retention should always maintain an important expectation, but leaders should be aware of the additional, intentional efforts that are required to enhance a sales culture if talent and new business have not been emphasized. Does your firm have increased new business sales goals? Have you invested in a pipeline management platform to organize sales efforts? When was the last time you’ve hired sales talent with the intention of building new books of business? These are only a few questions to quickly gauge your efforts in intentionally building a stronger sales culture.
  • Culture: Employees want to feel as though they are an important part of a greater purpose. When your organization conducts an employee engagement survey, feedback is vital for management consideration and action. Using survey data demonstrates that your organization is dedicated to enhancing performance and sparking change. More importantly, firms should benchmark themselves against other organizations enabling leadership to compare results to industry averages. Once firms complete this type of survey, leaders can create a more intentional plan to improve in areas where scores are the lowest and strive to beat insurance industry cultural averages.
  • Productivity: The average Total Commissions & Fees per Production Person for the Best 25% of member firms in MarshBerry’s Connect Network is $809,962. How does this compare to your production team – do you have this number available at your fingertips? Producers or owners who are effectively delegating their servicing load should have higher than average performance in this area, but this ratio could be further analyzed depending on the firm’s average account size. Knowing how your firm compares to some of the industry’s most elite peers can either provide peace knowing you’re a top performer or give your team something to strive for.

Needless to say, you cannot track, monitor, and improve every metric. But, if nothing is tracked, management will not know whether the agency is improving. Management should select key ratios which align with the corporate goals. Be careful when selecting the KPIs. It is important for these metrics to work together. Once selected, the metrics should be used to communicate the goals and related objectives to the entire organization.

If you have questions about Today’s ViewPoint or MarshBerry’s benchmarking practices, peer exchange, and MAX Performer Award, email or call Brooke Lugonjic at 616.828.0741.Subscribe to MarshBerry’s Today’s ViewPoint blog for the latest news and updates and follow us on social media.  


Source: MarshBerry proprietary financial management system Perspectives for High Performance (“PHP”).  Data as of 12/31/2020.

MarshBerry continues to be the #1 sell side advisor in the industry (as ranked by S&P Global). If you’re considering selling your firm, we are the best choice to help you through the complicated process. If you don’t hire MarshBerry, hire a reputable advisor that can help you navigate one of the most important business decisions you will ever make. You will be much better off having an advisor in your corner that knows the industry than trying to do this on your own. 

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