2017 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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3.1%

Top Quartile

20.6%

Over age 55

4.3%

Age 46-55

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Age 36-45

3.7%

Average

13.7%

Up to age 35

2.6%

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 10.6%

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 in this group is down from 15.3% last year to 13.7% this year, fueling the organic growth decline. Sales Velocity in agencies this size is evenly distributed by age, with 6.3% Sales Velocity coming from producers 45 and younger and 7.4% from producers over age 45.

New Business

Average Book

Over age 55 31.2%

Commercial P&C

$116,564

$963,362

Age 36- 45 23.3%

Personal P&C

$60,174

$381,296

Life/Health/ Financial

$155,642

$1,025,124

Multi- Line

$137,102

$989,747

Age 46- 55 35.0%

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Effective NUPP

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Group Average:

Agencies in this group have increased their producer

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investment in the last year, raising Effective NUPP from 0.7% to 0.9%.