News
Groundbreaking Agent Study Enters Second Round
February 5, 2009
FOR IMMEDIATE RELEASE
CONTACT:
Shirley Lukens
(404) 233-5545
Reagan Consulting Survey Creates New Industry Benchmarks for Large Agent/Broker Organic Growth, Profitability
ATLANTA (February 6, 2009)—Reagan Consulting announced it is launching its second quarterly Organic Growth & Profitability (OGP) Survey—providing a new national standard for these two key value drivers among large agencies and brokers across the U.S.
The first study was conducted in late 2008 to reflect the first nine months of last year; this next survey will reflect full year 2008 results.
“While there is quarterly information available on these metrics for a small number of public brokers, there is no standard for the other 99% of the industry.” says Kevin Stipe, a Reagan Consulting partner and the study’s leader. “In today’s tumultuous marketplace, agency leaders are hungry for meaningful, real-time performance data. Our goal is to provide every large agency in the U.S. with a quarterly report enabling its leaders to understand exactly how they measure up to their peers.”
The first study accessed information from 109 insurance brokers with a median annual revenue of more than $15 million. For context, the study also provides comparisons to results of publicly traded brokers Aon, Arthur J. Gallagher, Brown & Brown, Marsh and Willis.
The third-quarter 2008 study offers some compelling findings:
- Industry data indicates that large private broker organic growth rates exceeded public broker growth rates.
- About 42% of surveyed firms indicated that organic growth was negative during the first nine months of 2008.
- Only 8.3% of firms surveyed reported double-digit organic growth (e.g. more than 10%).
- To be a top-25% performer nationwide required organic growth of 5.9% or more.
- Employee benefits was the fastest growing line of business (9.5%) for study participants.
- On average, the public brokers reported a higher EBITDA margin (Earnings Before Interest Taxes Depreciation and Amortization divided by revenues) than study participants (22.6% vs. 20.3%.)
- To be a top-25% performer nationwide required an EBITDA margin of 25.5% or higher.
Every agency or broker participating in the study receives a customized report detailing its performance in a variety of areas. The OGP Study results are being published as a part of the Value Creation Dashboard feature in Leader’s Edge magazine, the official publication of the Council of Insurance Agents & Brokers (CIAB). Additional data and related articles and commentary will appear on www.reaganconsulting.com.
Stipe said, “One-third of the agents and brokers contacted for the first survey provided their proprietary information for our analysis. That’s a remarkable turnout.”
Agents and brokers with at least $5 million in annual revenues that are interested in participating in the fourth-quarter 2008 study should contact Shirley Lukens (shirley@reaganconsulting.com) no later than February 13. Agents interested in future participation can contact Reagan at any time.
About Reagan Consulting
Atlanta-based Reagan Consulting (www.reaganconsulting.com) is a leading financial and management consulting firm specializing in the valuation, strategy and M&A for large, privately-held brokers. Reagan consultants also provides thought leadership to the banking and insurance industries through perennial research, seminars and other industry forums.
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