2016 BPS Study

Brokerage Industry Perspectives How Best Practices agencies are leading the way

Below is the NUPP, Success Rate and Effective NUPP average for all six BPS size categories. 

NUPP

Effective NUPP

55.5% Producer Success Rate

0.7%

>$25.0M

1.3%

>$25.0M

0.9%

$10.0M‐$25.0M

1.4%

$10.0M‐$25.0M

60.8%

0.8%

$5.0M‐$10.0M

64.1%

1.2%

$5.0M‐$10.0M

0.6%

$2.5M‐$5.0M

64.5%

0.9%

$2.5M‐$5.0M

0.7%

$1.25M‐$2.5M

74.0%

1.0%

$1.25M‐$2.5M

1.3%

<$1.25M

80.7%

1.6%

<$1.25M

0.0%

0.5%

1.0%

1.5%

0.0% 0.5% 1.0% 1.5% 2.0%

While all firms need to make a meaningful investment in unvalidated producers, many BPS firms rely on their Age  Banding of Sales Velocity to help guide their focus as they search for new producers to ensure they are not exacerbating  an already‐existing age concentration. 

Producer and Leadership Succession Planning 

As Baby Boomer producers approach retirement, many agencies are awakening to a challenge far greater than expected.  Insurance brokerage is a relationship business, and many producers’ clients are heavily concentrated among their peer  group. Thus, as a producer approaches retirement, the decision‐maker at many of his/her clients may be approaching  retirement also. And regardless of whether or not the decision maker is facing retirement, it is not unusual for a  producer’s book of business to undergo a higher level of account attrition as he/she retires.   Recognizing this, many BPS agency leaders have been developing plans and protocols for transitioning producer books of  business when they do retire. Numerous approaches have been used, and typically a firm’s “standard plan” must be  customized to the needs and wishes of the retiring producer and those that will assume production responsibility for  each account once they retire. These plans vary widely across the industry, but typically include:  2) A process for determining which producer(s) will assume production responsibility for each transitioning client  going forward   3) A transitional compensation program that rewards both the incumbent producer and the new producer for the  time and effort that will be required of each during the transition. Some plans, for example, split the normal  producer commission between the two individuals, with the majority going to the retiring producer in the first  year, an even split in the second year, and then the majority going to the replacement producer in the third  year. After the third year, all commissions go to the replacement producer.  1) A notification period the producer is required to give prior to the transition 

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