The Ohio Independent Agents, through its data analytics LLC, IntellAgents, provides groundbreaking data analysis for agencies in the independent channel, largely using information they already provide to OIA. Its RISE Reports allow agencies to compare their performance against other, similar shops. But the possibilities are much broader, and OIA has a vision for the application of agency data that can help transform your business. Jeff Smith, CEO of OIA, gives a closer look at the program.

ACT News: Tell us about the agency profiles you have been able to create regarding the generational health of agencies. What are some of the key indicators of generational health? 

Jeff Smith: The RISE Report is a performance benchmarking tool that OIA produces for agencies that allows them to compare their performance against other agencies that are similar in their size and growth rate, regionally and across the state.

 

The profile looks at product line mix and carrier influence, top five carriers as a percentage of book (most have a core four that make up 90-95% of book), growth indicators, owner age, weighted average shareholder age, talent acquisition and retention, and other factors. We look at how the agencys statistics stack up against other agencies profiles. (Carrier influence measures how much influence the agency has with its carrier partners based on size of book and how much of the carriers business in the state the agency represents.)

 

A lot of the information is already available to us based on our engagement with the agencies over the years. Agencies have to open themselves up somewhat to allow us to do a full comparison, but generally we are not asking for very much in the way of new information.

 

In terms of generational health, key indicators are who owns the agency and what is the owners age. We also look at staff complexion and if they have a perpetuation option. What youll see in some agencies is the employee age range is also older. Our data shows that a 55-year-old average staff age correlates with declining revenue. An agency with a 49-year-old average age for the staff is typically growing in revenue; an average of 49 years old suggests a diverse staff-age spectrum. This is not always the case and its not that great of a disparity, but our data is showing that, on average, the age difference in agency staff may be an indicator of health.

 

We know the fastest-growing agencies that have the highest organic premium growth have an average agency-owner age of 53. Those agencies that are shrinking average 63 years old for owners. There is a point in time when the agency owners age correlates with declining revenue. This a hard message to deliver, but agencies can use this data to make informed decisions. Those owners close to retirement age can see in a data-driven, factual way that they need to act. How they do that is up to them. We present characteristics that tell a potential story. Hopefully the data will inspire them to take good action.

 

We try to create actionable insights. For example, in some agencies, we can say, Hey, youre 63, and theres no one under the age of 50 who is a viable perpetuation option. Lets get a plan together.

 

Often the solution is to diversify ownership. But sometimes it is to sell.

 

We help them enter the perpetuation process. We walk them through it and help them in any way we can. We provide perpetuation advisory services, broking services for a sale, etc. We also offer valuation services so agencies can get an understanding of their fair market value. 

ACT News: You mentioned at the ACT Meeting in Cincinnati in May that the OIA has been working on agency dashboarding, data management as a service, and predictive analytics, among other projects. How do these services each help agencies thrive?  

Jeff: By and large, agencies are running their business on systems of record. The agency management system helps them manage policies but not their business. This is where wed like to provide dashboards that allow principals to use key indicators they choose so they can monitor those factors on a daily, weekly, monthly basis. Some agencies use Salesforce. That does many things, but it is a behemoth. I t also has not been adopted broadly in the IA channel, because the cost and manageability exceeds what smaller agencies can do. We [OIAs data analytics LLC, called IntellAgents] are leveling the playing field through dashboarding. We get information from multiple sources so they can monitor their progress toward their own goals.

 

We are in the beta phase of this. Using comparative data from other competitors is on the horizon. The RISE Report is the real-time, currently available benchmarking tool.

 

Many agencies are dismissive of survey information or national data because the data are mismatched to the circumstances of the agency. Our data is much more tailored to the size of agencies in the IA channel and allows us to be more relevant than broad-brush reports.

 

If you have a big corporate body behind you, there are data firms that can do wonders for you. But for those in the smaller independent channel, we feel like we can step in and help that level.

 

As far as data management as a service, I dont see us replacing agency management systems, but we will be able to help agencies with the data they own. As a channel, we dont know how to extract that data. OIA will be able to do that: put it into the system and extract it for meaningful use. We are building toward that. Its a ways off right now. And were not going to do data management per se. Were not going to build the fields and manage customer policy information. Rather, were going to better leverage the data the agencies are collecting so it has meaning for their business. 

ACT News: In the May ACT meeting, some agents and owners expressed a distaste for too much turnover of their proprietary data.
 

Jeff: OIA and state partners have a unique relationship. We are the advocate and champion with the agencies. Were never sharing their information without their permission, even aggregated. They own us. We have a unique relationship: we are them, they are us.

ACT News: What are the greatest barriers to using agency data for all these initiatives?

Jeff: The culture. Getting agents to understand that dataeven at the agency levelis incredibly valuable and leveraging it is something we need to do and have a commitment to doing.

 

All the disparate technology, platforms and tools agencies have used over their lifetimes makes it hard to get a handle on all the information we own and how it can be applied. We need some data consistency and cleansing so it can be used. Data cleansing is the bigger part of the process. Currently, data is captured in entirely different ways across agencieseven within agencies sometimes. 

ACT News: You are bringing these analytics to states other than Ohio. How are you staffed, and how can an agency that wants to intelligently leverage its data get in on this program? 

Jeff: OIA currently has 28 staff members, eight of whom exclusively work on this project. We have a couple outside resources, contractors, but, yes, it is a heavy lift. We have data from about 17,000 agencies so far. That allows us to put together good analytics reports, but we are always open to bringing on more participants. We have 12 states on board so far.
 

For more information, agencies can go to ohioinsuranceagents.com or intellagents.io, or they can reach out to OIA with questions. If youre in another state that isnt already working with us, talk to your state association to get them involved.

Editor's Note:  Jeff Smith is the CEO of the Ohio Insurance Agents (OIA).  We thank him for sharing his insights on one set of tools available to further independent agent success within our distribution channel.