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While some agents and brokers are keen on the notion that bigger is better, size was not a factor for the Top 20 most productive agents and brokers in 1997.

Instead, these companies relied on specialization, technology and old-fashioned hard work to earn a spot on Business Insurance's annual ranking of the most productive U.S.-based agents and brokers.

For the 20 agents and brokers in the ranking, the average brokerage revenue per employee grew 6.4% to $192,225 in 1997. Agencies making the Top 20 ran the gamut in size, from an agency with $1.8 million in brokerage revenues and eight employees to a $126.9 million agency with 676 employees.

Comparatively, J&H Marsh & McLennan Inc., the world's largest broker, with $4.4 billion in 1997 brokerage revenues and 30,900 employees, averaged $142,275 in revenues per employee. Likewise, Aon Group Inc., which reported an estimated $4.03 billion in 1997 brokerage revenues and 33,000 employees, averaged $122,176 in revenues per employee. Neither broker made the most productive chart.

Specialization is key, according to the most productive agents and brokers. Others point to technology as the catalyst behind becoming more efficient and productive, while others say hard work and a smaller staff really pays off.

"It boils down to what we've been doing for the past several years, and that's specialization," contends John McGrath, president of Hobbs Group of California in San Francisco, whose parent Hobbs Group Inc., based in Waltham, Mass., ranks as the 10th most productive company, based on $182,006 in revenues per employee in 1997.

Hobbs Group specializes in strategic risk management programs for larger accounts generating more than $1 million in annual premiums.

For Associated Agencies Inc., productivity is only as high as its staff is strong, according to President Robert M. Schrayer.

The Rolling Meadows, Ill.-based agency is the 18th most productive company, with $157,894 in revenues per employee.

"We are fortunate to have very qualified people who work hard, are ambitious and do a great job," Mr. Schrayer said. "That's really the story."

Each year, Business Insurance ranks the 20 most productive agents and brokers based on information supplied to BI for the annual Agent/Broker Profiles issue (BI, July 20).

To be eligible for the list of the Top 20 most productive agents and brokers, companies must generate more than 50% of their 1997 brokerage revenues from commercial retail business.

For the eighth year in a row, Joseph Held Co. Inc. ranks as the most productive agent or broker. Revenues per employee increased 3% in 1997 to $318,750, the only agency on the chart to reach the $300,000 mark.

According to Kenneth S. Held, president and chief executive officer of the New York-based, family-owned agency, finding a niche is the key to the company's productivity.

"What we do is specialization," Mr. Held said. "Others just talk about it, we actually do it and have been doing it for 25 years."

Not only does the Joseph Held Co. specialize in writing catastrophe programs for high-value high-rise condominiums located in the coastal areas, it also is one of the largest suppliers of insurance for the beer distribution industry.

"We write the largest beer distributor in New York City, which is the largest beer distributor in the country," Mr. Held said. He added that the average premium for the agency's food and beverage distribution program is in excess of $1 million.

The agency also has found a niche providing coverage for Year 2000 computer compliance and system security for large financial institutions, Mr. Held said.

Houston-based Healthcare Insurance Services Inc., a perennially productive agency, reappears in the ranking at the No. 2 spot with $240,753 in 1997 revenues per employee.

The agency did not appear in last year's ranking because only 48% of its 1996 revenues came from retail business. In 1997, that percentage increased to 58.6%, making it eligible for the ranking.

The Sklover Group Inc. dropped one spot in the ranking, to No. 3, based on $230,375 in revenue per employee.

1997 brokerage revenues remained flat at $1.8 million as did Sklover's employee count, which was unchanged at eight.

"Specialization, without a doubt, that's the key," said Chairman Richard Sklover, when asked what makes the Westbury, N.Y.-based agency so productive. The agency specializes in the travel and credit card industries.

"We represent 5,000 travel agents with all their insurance and God only knows how many credit cards we represent in the country," Mr. Sklover said. "That's really the reason why" the agency is so productive.

Jumping two spots in the ranking, The Wood Insurance Group Inc. takes the No. 4 spot, based on $224,093 in 1997 revenue per employee.

Wood's overall 1997 brokerage revenues are down 14.2% to just over $2 million, but head count also shrank by three, to nine employees.

In addition to investing in "faster and more efficient" computer equipment and software, the Phoenix-based agency thrives on its small staff, according to President David Wood.

"Our company operates more efficiently with a certain-sized staff," he said. Not only do all nine employees know and like each other, but "everyone brings to the table a strength that is another's weakness. . .and work flows to each person's strength."

Plus, "it's a little more fun working hard with people you like," Mr. Wood added.

Finishing out the top five, AirSure Ltd. drops two spots in the ranking to No. 5, with $221,336 in 1997 revenue per employee, a 2.5% increase from 1996. The Golden, Colo.-based agency's 1997 brokerage revenue jumped 20.6% to $3.7 million, while its staff increased to 20 from 17 in 1996.

According to Bill Behan, president of the aviation insurance broker, AirSure's productivity comes down to the right people and the right automation systems.

AirSure hires the right people and gives them incentives and the training and supplies "needed to make their job easier," Mr. Behan said.

"We've got good systems, good people and committed players all the way around," he said.

Not surprisingly, the biggest jumps in productivity came from agencies that did not make the cut last year.

Norwest Insurance Inc., for example, reported the largest increase in revenue per employee in this year's ranking, bolting 47% to $187,722. The Minneapolis-based agency, which assumes the No. 9 spot, is the largest among the Top 20, with $126.9 million in 1997 brokerage revenues and 676 employees.

Mesirow Insurance Services saw a 39.4% jump in productivity in 1997. The Chicago-based broker became the 16th most productive agency, with revenue per employee of $162,026.

The Jacobs Co. Inc. makes an appearance on this year's chart in the No. 14 spot, based on $163,303 in 1997 revenues per employee, up 23.6% from 1996. The Columbia, Md.-based agency's 1997 brokerage revenues increased 6.7% to $3.1 million, while head count decreased to 19 employees from 22 in 1996.

Revenues per employee at The Graham Co. increased 9.8% to $156,654 in 1997, enough to put the Philadelphia-based agency in the No. 19 spot. Brokerage revenues increased 7.2% in 1997 to $19.9 million, while the number of employees at The Graham Co. fell by three to 127.

Rounding out the Top 20 is Torrance, Calif.-based HCM Benefits Inc., which had revenues per employee of $155,536.

Agents and brokers missing from this year's list, including last year's No. 19 Corporate Benefit Consultants Inc. and No. 20 The HDH Group Inc., posted revenue per employee below this year's cut of $155,536.

Last year's No. 5, Wittner & Co., and No. 13 San Diego Associates Inc., did not participate in this year's BI directory of agents and brokers.