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

18.8%

3.4%

Over age 55

Age 46-55

4.1%

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Age 36-45

Average

11.7%

Up to age 35

2.3%

2.0%

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. $2.5 to $5.0 million firms had the lowest sales velocity of any size category at 11.7%. This group also had the lowest result in 2017. In addition to a low Sales Velocity, this revenue category also has the lowest investment in production talent. The NUPP of 0.8% is the lowest among all size categories, as is the effective NUPP of 0.5%.

Up to age 35 9.7%

New Business

Average Book

Over age 55 37.2%

Commercial P&C

Age 36- 45 20.0%

$56,039

$548,983

Personal P&C

$54,039

$314,828

Life/Health/ Financial

$50,311

$322,707

Multi- Line

$49,455

$565,579

Age 46- 55 33.1%

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Effective NUPP

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Group Average:

 38