Is your agency’s organic growth defying gravity?
A new report from the Reagan Consulting Organic Growth and Profitability (OGP) survey of 130 mid-size and large agencies and brokerage firms reflects the current market climate for agencies and brokers - and the news is lackluster at best. See Morgan Smith's article How Long Will Agent/Broker Organic Growth Continue ‘Defying Gravity’? in IA Magazine.
Independent insurance agents and brokers reported a 5.8% organic growth rate in the first quarter of the year—a drop from last year’s 6.2% Q1 results.
“Organic growth seems to be hanging in there despite some alarming trends in p-c pricing,” says Kevin Stipe, president of Reagan Consulting. “Right now, agency organic growth is defying gravity. And the question is: How long will that continue?”
While all lines grew at a slower pace in 2015 than 2014, commercial lines took the biggest hit with a 1.8% year-over-year growth decline from 8.4% to 6.6%. Group benefits posted a 4.5% growth rate and personal lines 1.3%—down 0.5% and 1.5% from Q1 2014, respectively.
The silver lining? Private brokers are doing slightly better, with a 5.8% organic growth rate compared to 4% for publicly held companies. Plus, Kevin Stipe, president of Reagan Consulting, says that “firms today are better positioned to take control of their circumstances than in the past and to fight the effects of a soft market.”
See the Reagan Consulting press release on the study.