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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2.8%

Top Quartile

21.4%

3.9%

Over age 55

Age 46-55

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Age 36-45

4.6%

Average

14.2%

Up to age 35

2.9%

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 10.9%

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 from producers under age 46 (7.5%) is the second highest among all size categories. Though $10 - $25 million firms had a relatively large NUPP of 1.9%, they had the lowest producer success rate (54.1%), reducing their Effective NUPP to 1.0% For the second year in a row, personal lines producers in this size group produced the most new business of all size categories ($84,224 per producer).

New Business

Average Book

Over age 55 31.4%

Commercial P&C

$98,353

$938,814

Personal P&C

Age 36- 45 28.0%

$84,224

$391,551

Life/Health/ Financial

$119,590

$886,324

Multi- Line

$56,589

$505,818

Age 46- 55 29.8%

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Effective NUPP

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Group Average:

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 46