2021 Best Practices Study

Executive Summary

Agencies between $1.25 Million and $2.5 Million in Revenue

Production

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.

Top Quartile

4.3%

21.9%

Over age 55

2.8%

Age 46-55

•

Age 36-45

3.1%

Average

13.9%

Up to age 35

3.8%

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 0.5%, the second lowest NUPP of all the Study groups. This group’s investments in young producers (under age 36) continues to pay dividends. They delivered 27% of the Sales Velocity achieved. The most senior group (over age 55), however, delivered the largest Sales Velocity contribution, an indication more young producer investment may be prudent.

Up to age 35 23.0%

New Business

Average Book

Commercial P&C

Over age 55 38.6%

$47,036

$313,173

Personal P&C

$21,706

$145,970

Life/Health/ Financial

$52,039

$252,886

Age 36- 45 20.6%

Multi- Line

$25,222

$251,041

Age 46- 55 17.8%

•

Effective NUPP

Group Average:

Producer Success Rate 49.1%

NUPP

Effective NUPP

•

1.1%

0.5%

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