agency advisor
3 Metrics BGAs Should Consider
I
TIFFANY A. MARKARIAN
Founder and Managing Director
Advantus Marketing, LLC
Tiffany Markarian is the
Founder and Managing
Director of Advantus
Marketing, LLC, a marketing
and management consulting
firm devoted to helping
financial professionals
advance their marketing
momentum. She can
be reached at tiffany@
advantusmarketing.com.
Visit advantusmarketing.
com for more information.
8 perspectives WINTER 2019
n working with BGAs on their
business development, there
is a set of questions that
continually come up during
conversations. The first question
is usually “How do we go after
new markets…particularly
supporting wealth advisors?”
The second question is often
“How do we set ourselves apart
in the industry?” The third
question, which might be the
most important, is “We had
a good year, but growth has
stagnated, and we are not sure
why?” In this last statement,
this is where metrics come into
play. It is your metrics that
can either drive or hinder your
growth, depending on which
angle you look at them.
Like all effective insurance
firms, BGAs will measure the
critically important areas such
as profit and loss, premium,
revenue by product line and
expenses. In terms of expense
management, they will measure
staffing and capacity relative to
the business coming in. They
may look at the number of case
managers to overall case count
and the number of external
brokerage/marketing managers
to the number of financial
advisors or clients being served.
We know these are important
metrics and need to be part of
every base analysis. However,
there is an additional set
of metrics that many BGAs
overlook, and when you dig
deeper into these metrics, this is
where the real story can often be
found. These additional metrics
may provide deeper insights into
why growth may be stagnated or
the real markets you need to be
focusing on.
It is your metrics that tell the
story.
1. CASE THRESHOLDS
AND CULPRITS
One set of additional metrics
to consider is not just how many
cases are coming through and
whether or not the volume
can be supported by your case
managers. You may need to look
at the actual size of the cases,
meaning do you have a minimum
threshold? Ask yourself, what
minimum premium or override
threshold needs to be met to be
profitable for your operation?
How many cases did your team
process over the last two years
that were under this profitable
threshold? Perhaps you had
a significant amount of cases
under $500 premium, or under
$100 or $200 of override,
depending on the threshold for
your specific business.
Having been in many BGA
offices that are seeking growth,
this seems to be a common issue.
It may be costing you more to
process a bulk of lower tier cases
than the profit being made.
For certain, there are many
BGAs who have a vast foothold
“It is your
metrics that
can either drive
or hinder
your growth,
depending on
which angle you
look at them.”
in technology and can easily
and efficiently process a large
volume of smaller cases with
good profitability. Perhaps you
have a direct-to-consumer model
where a flow of smaller cases can
be easily incorporated.
On the flip side, there are
many firms where 10% to 30%
of the cases coming through
are falling below a profitable
threshold and those cases may
be severely burdening your
case management team. It may
not be profitable or efficient
to support these lower cases
as they may be clogging your
overall operation. The problem
may not be the case count per
number of case managers you
employ; the root problem may
be the types of cases coming in,
and that rests on a specific group
of advisors or clients who are
submitting these cases.
All too often, the planning
strategies used are to support