Last year was a second consecutive record-setter for independent insurance agents and brokers, but rate increases and inflation were driving their growth, not new business. This is one key conclusion of Reagan Consulting’s year-end 2022 Growth & Profitability Survey (GPS), reports Bobby Reagan, partner and executive chairman of the firm.
GPS results show median organic growth in 2022 was 10.2%, the highest in Reagan-recorded history, and it exceeded 2021 median organic growth by almost two percentage points. With that growth rate, “one would generally expect profit margins to rise,” says Reagan. Instead, they’re staying “at a consistent level,” not rising.
2022 growth by product line
Fourth-quarter (Q4) median growth rates for 2022 are: Commercial lines organic growth was 12.6%. Personal lines grew by 7.5%, which Reagan describes as “amazing.” Employee benefits continues its recovery from the pandemic, posting a growth rate of 6.0% as compared with 4.0% in Q4 2021.
Reagan advisory
“Our industry seems well poised to continue to prosper,” says Reagan. But he adds that in the current climate, agent and broker growth could be impeded by a recession, a reduction in inflation or the moderation of property-casualty rates. These are “all external factors beyond our control.” He advises agents and brokers to “do a better job on account retention, increase new business sales and improve operating efficiencies … Do not assume it is business as usual.”
To receive the full Reagan commentary or more information about Reagan Consulting, contact Sarah DuPre at Reagan Consulting, 404.869.2535 or sarah@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.