2018 Best Practices Study

Definitions

Sales Velocity

Age Banding of Sales Velocity

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.

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Top Quartile

2.7%

17.5%

Over age 55

2.4%

Age 46-55

4.4%

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Age 36-45

Average

12.3%

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. Agencies in the $5.0 - $10M revenue category scored the highest new producer success rate (63.0%) in the 2018 Study . With a Sales Velocity of only 12.3%, agencies with revenues between $5.0 - $10M had the second lowest new business generation score among the Study groups. In terms of the age banding on the Sales Velocity achieved, agencies in this revenue category showed a

Up to age 35 13.5%

New Business

Average Book

Over age 55 32.1%

Commercial P&C

$67,161

$573,068

Personal P&C

$59,240

$277,412

Age 36- 45 27.9%

Life/Health/ Financial

$81,812

$508,762

Multi- Line

$69,405

$549,394

Age 46- 55 26.4%

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Effective NUPP

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Group Average:

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nice balance of contribution between the four producer generations represented.

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