P&C Carriers can Improve Combined Ratio 3-5 Points with an Effective Agency
Management Practice, says Ward Group
CINCINNATI, Dec. 5, 2012
CINCINNATI, Dec. 5, 2012 /PRNewswire/ --Ward Group, a McLagan/Aon Hewitt
company and the leading provider of benchmarking and best practices studies
for insurance companies, recently presented a discussion paper and held a
webinar regarding challenges facing property-casualty insurance carriers in
managing their independent agency distribution system and the benefits of
implementing an effective agency management and tiering program.
Many independent agencies have been drastically affected by market conditions
and catastrophe losses over the past several years. Commissions are lower for
many agencies requiring them to work harder for less. Consequently, insurance
companies distributing through independent agencies have felt the effects of
declining agency performance on their bottom line.
According to Ward Group, although many insurance companies have a method for
tiering their agencies, not all of them take a true statistical approach to
measure their agency force. The subjectivity in managing a company's agency
force should be minimized to more effectively evaluate and communicate an
agency's value and contribution to company performance. An objective and
statistical approach is needed to provide credibility to the management
process, consistency for evaluating agency performance and, thus, establish
trust in the process across all company departments. It is also important for
carriers to work collaboratively with agencies, more effectively communicate
the company's goals and risk appetite and learn directly from the agency's
experiences and opportunities.
"Carriers benefit from a distribution management practice that effectively
measures agency performance, filters out the low performers and identifies the
right agencies to help meet future growth and profitability goals", said Jeff
Rieder, head of Ward Group. "Our experience has shown that when an agency
management program is performed correctly an insurance company can lower the
combined ratio three points to five points and drive sustainable long-term
value for both the company and their agencies.
To learn more about Ward Group distribution management and benchmarking
programs for insurance carriers, contact Doug Terrill at
Go to www.wardinc.com for a copy of the discussion paper.
Additional Ward Group Resources
o Operational Benchmarking Programs
o Executive Compensation Consulting
oCompensation and Pay Practices Surveys
About Ward Group
Ward Group, a McLagan/Aon Hewitt company, is the leading provider of
benchmarking and best practices studies for insurance companies. The firm
analyzes staff levels, business practices and expenses for all areas of
insurance company operations and helps companies to measure results, optimize
performance and improve profitability. For more information about Ward Group
and the Ward Research Center, visit www.wardinc.com.
About Aon Hewitt
Aon Hewitt is the global leader in human resource solutions. The company
partners with organizations to solve their most complex benefits, talent and
related financial challenges, and improve business performance. Aon Hewitt
designs, implements, communicates and administers a wide range of human
capital, retirement, investment management, health care, compensation and
talent management strategies. With more than 29,000 professionals in 90
countries, Aon Hewitt makes the world a better place to work for clients and
their employees. For more information on Aon Hewitt, please visit
Ward Group Media Contact:
SOURCE Aon plc; Ward Group
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