Management & Organization Study

The M&O Study is custom designed to meet the unique needs of the agency being evaluated and provides recommendations to help maximize profitability and productivity. The report can be used as part of the agency annual business planning process, to set goals for the implementation of the recommendations.

Management can select all or only a few of the areas listed below to be a part of this study. Costs vary based on the anticipated time that the study will take, based on a discussion of management's needs and the number of days that will need to be spent both in the agency and on the report, if one is desired. An on-site oral report will be given and a written report is optional.

Study Components

Most complete reviews of an agency in a typical M&O Study cover the following areas:

Systems and Operations Review
The agency's current operations and procedures are reviewed to determine what needs to be streamlined to improve productivity of the staff. The following six basic agency functions will also be analyzed and recommendations will be made for: Sales, Marketing, Service, Claims, Accounting and Administration

Productivity Analysis
An analysis is made of the productivity of producers, CSRs and support staff and standards of performance for average and well-run agencies of similar size are provided.

Book of Business Analysis
The make-up of the book for both product mix (personal versus commercial versus life/health insurance) and size of account written has a dramatic effect on profitability and productivity of the agency. An analysis of the agency's book is provided, as well as recommendations to improve the make-up of the book, account development and retention techniques and who should handle which accounts.

Automation Utilization
A review of the usage of the computer is made relative to the functions of accounting, word processing, profiling of accounts, marketing and rating, as well as interface capabilities with carriers.

Personnel & Management Review
A Confidential Employee Survey is completed by all employees of the firm prior to the agency visit. The results of this survey are tallied and produced in the report to give management input on the perception of the employees on various management, organization, personnel and procedure issues. Recommendations to improve employee's attitudes, morale, perceptions and management are also provided.

Producer Activity and Compensation
An analysis is provided of the production function, including the compensation plan for producers, perks provided, what the agency can afford to pay and who should be performing which functions in the agency (i.e. producers, CSRs, marketing personnel or assistants). Sales management recommendations are given. A discussion of producer contracts and information on vesting, stock options and equity for producers is provided, if applicable.

Carrier Analysis
The agency's top ten markets are analyzed, as well as concentrations of volume with markets, the marketing/placement function provided in the agency, "preferred" status opportunities and recommendations on how to improve carrier relationships.

Financial Analysis
Both the income statement and balance sheets are reviewed and compared over a three year period. The review not only provides a historical perspective but also provides agency standards for similar sized firms to see how well the firm compares to its peers. Various important ratios are calculated and defined as well, including corresponding recommendations on financial management.

Costs and Procedures

The Management & Organization Study is provided on a fee basis plus out-of-pocket expenses, such as travel. An on-site visit is made for the study to conduct interviews with most employees and the owners. We attempt to keep expenses reasonable by booking in advance and whenever possible visiting more than one firm in a particular region to split expenses among clients.

A customized proposal and cost range for the consulting service needed by the agency will be provided based on a telephone interview that is used to determine the needs of the agency. A determination of the anticipated length of time the study will take is made based on the problems described and the number of days that will be spent both on-site and on the report. A written report is optional and an on-site oral report is included at the end of the visit for management.

The process begins by sending a retainer of 50% of the expected cost of the project, as well as three to five years of financial statements. Upon receipt a Consulting Questionnaire will be sent for completion for completion prior to the agency visit.

An annual update or review of the progress on the recommendations can also be provided, along with assistance with the firm's annual planning meeting for an additional charge. In conjunction with the M&O Study a fair market valuation can also be conducted, for a reasonable charge.

Please contact Oak & Associates today at 707-935-6565 for more information and a discussion of your needs and how we can help improve your operation and profitability. A customized proposal will be designed for you based on the discussion. References can also be provided.