Organic growth among agents and brokers fell for the first time in nearly two years in the third quarter of 2022. The organic growth rate in Q3 2022 was 9.5%, down from the previous quarter’s double-digit high of 10.2%.
According to Mark Crites, partner at Reagan Consulting, which has conducted the quarterly Growth & Profitability Survey (GPS) since 2008, the “deceleration could be a sign of economic realities beginning to impact the industry.”
Despite the decline, Crites claims that the industry’s organic growth is still “blistering.” He explains that nearly half (45+%) of respondents experienced double-digit organic growth in Q3 2022. Furthermore, according to Crites, “only 1.6% of respondents published negative organic growth results, the lowest percentage of respondents in GPS history.” This result is especially impressive given the current market uncertainty.”
According to the GPS, the organic growth of public brokers has been decelerating at a faster rate. Their average organic growth rate in Q3 2022 was 8.3%, down from 10.8% in the same quarter in 2021. “The public broker performance trend may be a foreshadowing of what is to come for GPS firms,” says Crites.
Lines of performance
Personal property-casualty insurance continues to outperform historically, with an all-time high of 5.9% organic growth in Q3 2022, up from 4.2% in the same quarter in 2021. According to Crites, personal insurance has “become a differentiator for many agents and brokers seeking to round out accounts and create a stickier client relationship.”
For further observations and commentary on the Q3 results, contact Crites at Reagan Consulting, 404.869.2625 or mark@ReaganConsulting.com.
The Reagan GPS was formerly known as the Organic Growth & Profitability (OGP) Survey. Each participating agency in the GPS receives a customized, confidential report of its performance compared with the overall survey results, along with Reagan’s quarterly commentary of industry trends affecting agents and brokers. For information on participating in the survey, contact Michelle Appelbaum at 404.869.2541 or michelle@ReaganConsulting.com.
About Reagan Consulting
Reagan Consulting is a management consulting firm providing strategic consulting, valuation, capital raising, and merger-and-acquisition (M&A) services to the independent insurance distribution system. The firm’s services for insurance agents and brokers, bank-owned agencies and other participants in the insurance distribution marketplace include: appraisals of fair market value, capital raise advisory, mergers and acquisitions advisory, ownership perpetuation planning, strategic planning facilitation, key employee compensation and equity plan design, and agency performance benchmarking. Reagan Consulting co-developed the well-known Best Practices Study and produces the quarterly Growth & Profitability Survey.