Survey says: Growth fell in Q3 but agents are optimistic about 2017
Agent-broker organic revenue continued to fall in the third quarter of 2016, according to the latest Organic Growth and Profitability Survey from Reagan Consulting but, despite this, another report indicates that most independent agents are planning "moderate to aggressive" growth over the next five year and have an optimistic outlook for the coming year.
Julia Ybarra looks at both reports in Agency Checklists. Here's a summary and links for both.
The Q3 report was based on a quarterly survey conducted by Reagan Consulting, a management consulting and merger-and-acquisition advisory firm. They have been conducting these surveys quarterly since 2008. The most recent survey found that Q3 was the second consecutive quarter of where organic growth declined and Kevin Stipe, president of Reagan Consulting estimates that Q4 will also drop.
"According to the study, growth fell to 3.6% percent, the lowest pace of growth in the past five years. In particular, Mr. Stipe highlighted the sluggish pricing in commercial lines as the “primary culprit” in the continued slow pace of revenue growth. Commercial lines organic revenue growth decelerated to only 3.0% this third quarter. In 2013, the organic revenue growth rate was at its peak at 8.4% in the same quarter."
Read more: Agent-Broker Organic Growth Slow Again In The Third Quarter of 2016
The second study - How Independent P&C Insurance Agencies Thrive in 2016’s Competitive Marketplace - was conducted by Hanover Research and sponsored by Vertafore. This is the third year they have published this study to measures both the current sentiment of agencies as well as their plans for investment in growth planning. Overall, most agencies (70%) expressed optimism about the future, with 46% stating they are “very optimistic.”
“Independent agents are acutely aware of the disruption facing the industry and their businesses, but they’re not letting it impact their spirits,” said Bruce Winterburn, VP of industry relations at Vertafore. “By doubling down on technology that bolsters customer relationships and continuing to integrate mobile technology into the whole of the business, the research shows the investment in paying off. Growth is in fact happening and at an accelerated pace. If agents continue mixing technology tools with their customer-first mindset, the future of the independent channel is bright.”
To read more about the survey findings or to access a copy: Independent Agents Are More Optimistic and Growth-Minded As They Look To 2017