The 2013 Best Practices Study by the IndependentInsurance Agents & Brokers of America (IIABA or the Big “I”)revealed an increase in agencies with specialization, an increasein technology investment and greater profitability across most ofthe study's revenue groups.

The Best Practices Study began in 1993, as part of thefoundation's efforts to improve agency performance and createagencies of higher value. The survey and subsequent study ofleading independent insurance agencies documents the effectivepractices and encourages other agencies to adopt similartactics.

Findings reveal that specialization has increased in agencies ofall sizes, suggesting that developing specialized expertise in acertain industry or product helps agencies facilitate targetedleads and referrals, improve retention and also remain competitivein the industry.

Additionally, the study documented an improvement in organicgrowth since last year's study, with the average growth rate intotal commission and fee revenue at 9.4 percent (up from 2.1percent) for agencies with net revenues of less than $5 million.For agencies with net revenues greater than $5 million, that numberis at 9.8 percent (up from 4.5 percent) from last year.

As a whole, agencies are expanding, investing in growthstrategies that allow for organic growth and obtaining acompetitive edge. Hiring new producers, enforcing greater produceraccountability, focusing on specialty areas and expandingmarketing efforts are just some of the strategies that have allowedfor industry growth.

Strong revenue growth, in turn, has improved agencyprofitability. Results show that contingent income has grown at anaverage of 21.8 percent for agencies with revenues less than $5million, and an average of 10.7 percent for revenues more than $5million. Agencies improved in monitoring and controlling expenses,allowing operating profits to grow faster than contingent income.Additionally, agency shareholders can expect to earn 15 to 17percent per year through stock price appreciation and shareholderdistributions.

The study also revealed that many of the Best Practices agencieshave plans to invest in technology in the coming year, includingInternet marketing and social media efforts and agency managementsystems.

“The 2013 results indicate that Best Practices agenciescontinue to grow and increase profitability, the key components ofagency value,” says Robert Rusbuldt, Big “I” president & CEO.“Overall, we are pleased, but not surprised, that the independentinsurance agency system remains strong andstable.”