2019 Best Practices Study

Definitions

Sales Velocity

Age Banding of Sales Velocity

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Sales Velocity is a critical metric in determining organic growth. It is defined as this year’s written new business divided by last year’s commissions and fees. Age Banding of Sales Velocity can help a firm assess where new business and growth are coming from and prepare for perpetuation.

3.5%

Top Quartile

20.7%

Over age 55

3.8%

Age 46-55

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Age 36-45

Average

13.6%

3.5%

Up to age 35

2.8%

Comparison Group Average

Book of Business per Producer (commissions and fees)

Book of Business by Age

Notes & Definitions

• Weighted average producer age (WAPA) is 46. •

Effective NUPP, which is the product of an agency’s investment in unvalidated producers (NUPP) and success rate in hiring producers (Producer Success Rate), is expressed as a percentage of net revenue. It is the best overall measure of an agency’s effectiveness in recruiting and developing sales talent. $2.5 – $5.0M firms had the second lowest Sales Velocity of any size category at 13.6% and the lowest Sales Velocity for producers 45 and under. In addition to a low Sales Velocity, this revenue category also has a relatively low investment in production talent. The NUPP of 1.3% is the lowest among all size categories, and the effective NUPP of 0.8% is second lowest.

Up to age 35 12.7%

New Business

Average Book

Over age 55 35.3%

Commercial P&C

$69,368

$551,557

Personal P&C

Age 36- 45 23.2%

$39,210

$250,995

Life/Health/ Financial

$83,919

$290,794

Multi- Line

$56,890

$465,214

Age 46- 55 28.8%

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Effective NUPP

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Group Average:

 38