2025 Best Practices Study

Organic growth for independent agencies is driven by four factors:

1) New Business (adding new business)

2) Account Retention (holding on to existing business)

3) Economic Conditions (the overall economy)

4) P&C Rate (the insurance rate charged for P&C insurance policies)

New Business. New business activity is captured in the Sales Velocity metric, which is simply Commission and Fee (C&F) Income written as a percentage of the prior period’s baseline result. An agency that booked $250K in new C&F business in 2024 with $2.0M in C&F income in 2023 would have a 12.5% Sales Velocity. In general, a Sales Velocity north of 12 is considered healthy.

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

EXAMPLE: 2024 Written New Business 2023 Commissions & Fees

$250,000 $2,000,000

The answer to the question, “Do we have a strong sales culture?” is best answered by an agency’s Sales Velocity

SALES VELOCITY

12.5%

result. An agency without an industry average or better Sales Velocity is unlikely to have a strong sales culture. As the old saying goes, “nothing good happens until someone sells something.” For 2025, five of the six revenue categories for which we have year-over year data posted declining Sales Velocity results. Although each BP group managed to exceed the 12.0 Sales Velocity baseline, a slowing growth engine is something to watch very closely.

Sales Velocity

15.9%

15.1%

15.0%

15.0%

14.9%

14.3%

14.0%

14.3%

14.1%

13.4%

13.4%

13.6%

12.7%

N/A

<$1.25M $1.25-2.5M $2.5-5M $5-10M $10-25M $25-100M >$100M

2024 2025

An even more nuanced understanding of new business results comes from an examination of Sales Velocity banded by age class (Freshmen, Sophomores, Juniors, and Seniors). A healthy Sales Velocity balance between all four generations of producers is key to ensuring long-term organic growth potential and agency perpetuation viability. An overweighting in either of the junior or senior classes may indicate that an agency needs to ramp up its producer development efforts among its younger generations. 3.4% 2.8% 2.3% 2.1% 4.7% 4.4% 4.2% 5.1% 3.2% 3.3% 3.3% 3.5% 3.7% 3.2% 4.5% 4.2% $5-10M $10-25M $25-100M >$100M Sales Velocity by Producer Age / Class Freshmen (up to age 35) Sophomores (age 36-45) Juniors (age 46-55) Seniors (over age 55)

$2.5-5M

4.3%

2.5%

4.8%

1.0%

Account Retention. Account retention, expressed as renewed account revenue as a percentage of prior period revenue,

$1.25-2.5M

3.9%

5.3%

3.7%

1.5%

<$1.25M

3.3%

4.3%

5.3%

0.5%

2025 Study Highlights

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