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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Top Quartile

32.0%

6.0%

Over age 55

2.5%

Age 46-55

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Age 36-45

5.1%

Average

17.9%

Up to age 35

4.4%

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. This group’s Effective NUPP totaled 0.7, the lowest NUPP of all the Study groups. BPS agencies in the $1.25 - $2.5 million revenue category posted the highest Sales Velocity (17.9%) of all the 2020 Best Practices Study revenue categories. This revenue category’s senior class (the “Over age 55” producer group) had the largest contribution to Sales Velocity in this year’s Study , an indication that additional investments in new producers may be needed.

Up to age 35 19.5%

New Business

Average Book

Commercial P&C

Over age 55 38.5%

$75,805

$363,563

Personal P&C

$28,647

$118,854

Life/Health/ Financial

$28,072

$152,101

Age 36- 45 27.5%

Multi- Line

$53,881

$551,106

Age 46- 55 14.6%

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Effective NUPP

Group Average:

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 30