2020 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

22.0%

Over age 55

3.9%

Age 46-55

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Age 36-45

2.4%

Average

13.2%

Up to age 35

4.1%

Comparison Group Average

Book of Business per Producer (commissions and fees)

Book of Business by Age

Notes & Definitions

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. Investment in young talent pays dividends. Over 30% of Sales Velocity for Best Practices Agencies under $1.25 million was generated by producers under age 35, the largest freshman class contribution to Sales Velocity across all revenue categories. New business contributions for validated producers were consistent across all lines of business – no one line of business significantly outpaced the others.

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Up to age 35 14.8%

Over age 55 23.4%

New Business

Average Book

Commercial P&C

$39,568

$232,708

Personal P&C

$29,930

$143,019

Age 36- 45 22.1%

Life/Health/ Financial

$35,641

$162,618

Multi- Line

$49,619

$469,579

Age 46- 55 39.7%

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Effective NUPP

Group Average:

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 26