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

24.1%

3.9%

Over age 55

5.1%

Age 46-55

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Age 36-45

Average

15.9%

4.6%

Up to age 35

2.4%

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 10.0%

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. Sales Velocity for the largest firms is relatively strong at 15.9%, but these firms are getting a relatively low contribution to Sales Velocity from producers in the two youngest age groups (i.e., up to age 35 and age 36-45). These firms reported the highest average book size and highest average new business per producer of all revenue categories for all product lines. Agencies in this revenue category are demonstrating a commitment to producer development with an average NUPP of 2.2%, highest of all revenue categories.

New Business

Average Book

Over age 55 31.9%

Commercial P&C

$147,906

$1,077,036

Age 36- 45 23.3%

Personal P&C

$79,222

$434,662

Life/Health/ Financial

$162,414

$1,112,724

Multi- Line

$130,801

$1,265,522

Age 46- 55 34.9%

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Effective NUPP

Group Average:

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 50