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.

Top Quartile

23.1%

3.4%

Over age 55

Age 46-55

4.2%

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Age 36-45

Average

14.8%

Up to age 35

4.9%

2.3%

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. •

Up to age 35 8.8%

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. This category’s sales velocity is 14.8%, the third lowest among all size categories. Though $10.0 – $25.0M firms had the third highest NUPP at 1.7%, they had the lowest producer success rate (52.6%), reducing their Effective NUPP to 0.9% $10.0 – $25.0M firms had the lowest production from producers under age 36, with those producers contributing, on average, only 8.8% of the book of business.

New Business

Average Book

Over age 55 33.4%

Commercial P&C

$98,617

$843,561

Age 36- 45 26.9%

Personal P&C

$67,384

$324,825

Life/Health/ Financial

$131,264

$825,357

Multi- Line

$71,383

$919,438

Age 46- 55 31.0%

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Effective NUPP

Group Average:

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 46