2024 Best Practices Study

firms, of the need to make significant and ongoing investments in their growth engines (producer hiring and development, training, specialization, technology, etc.). Publicly traded and PE-fueled mega-brokers will continue to gobble up independent brokers who fail to do so.

Sales Velocity New business is typically the growth contributor that agencies can most directly influence. As such, new business is the lifeblood of any insurance agency. The old saying goes, “Nothing good happens until someone sells something.” Sales Velocity is used to gauge a firm’s new business results. Expressed as a percentage, Sales Velocity is new commission & fee (C&F) income written in the current year divided by the prior year's C&F. Sales Velocity cuts to the chase when answering the fundamental question: “Does an agency have a sales culture?”

Sales Velocity = Current period written new business divided by prior period recorded commissions and fees

EXAMPLE: 2023 Written New Business 2022 Commissions & Fees

$250,000 $2,000,000

SALES VELOCITY

12.5%

Sales Velocity

An agency generating a 12-13% Sales Velocity can rightly claim the sales culture moniker. Sales Velocity results for each Best Practices revenue category exceeded this critical 12 13% new business baseline.

15.9%

15.8%

15.7%

15.1%

15.1%

15.0%

14.6%

14.1%

14.0%

13.7%

13.4%

13.1%

<$1.25M $1.25-2.5M $2.5-5M $5-10M $10-25M >$25M

2023

2024

NUPP As crucial as Organic Growth and Sales Velocity are, an agency playing the long game must also focus on investments in future growth. Although these investments take many forms (sales training and development, technology, support staff hiring, strategic planning, etc.), perhaps none rivals an agency's investment in next-gen sales talent.

NUPP

Reagan Consulting developed the NUPP metric (Net investment in Unvalidated Producer Payroll) to capture an agency's investment in future sales talent. Expressed as a percentage of net revenue, NUPP is the difference between what an agency pays its unvalidated producers (producers-in training) and what the unvalidated producers would earn under the agency's regular commission schedule.

3.9%

3.1%

2.8%

2.3%

2.0%

1.8%

1.7%

1.7%

1.6%

1.6%

1.4%

1.3%

<$1.25M $1.25-2.5M $2.5-5M $5-10M $10-25M >$25M

2023

2024

Study Highlights

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