A new edition of the Growth and Performance Standards (GPS) study by the Academy of Producer Insurance Studies shows growth in revenues, commissions and productivity for independent insurance agencies since 1999.
The GPS tracks trends in independent agency performance and has been setting comparison standards for the industry since publication of the first edition in 1988.
Some findings surfaced from this new study:
• Average growth in total agency revenues is 10 percent, an increase from 8 percent in 1999.
• Eleven percent of all surveyed agencies purchased or merged with another agency within the past year.
• Nearly all agencies, 99 percent, use the Internet, and 80 percent of the agencies have their own Web site.
• Average pre-tax profit is now 9.80 percent, up from 7.43 percent in 1999.
• The average agency achieves revenues per person of $96,334, a 17 percent increase from 1999.
• The average commercial lines commission per account is $886, up from $763 in 1999.
• Commercial lines CSRs handle an average of $228,894 commission, up from $195,066 in the 1999 study.
Independent insurance agency owners use the results of the GPS study to compare their organization’s performance against their agency “peer group,” giving owners direction for future decision-making. The study provides averages, but also offers critical performance indicators of the best performing agencies (those in the top 25 percent for their particular standard).
The GPS gives comparison benchmarks for the following:
• Agency Profile;
• Income and Expense Averages;
• Balance Sheet Ratios; and
• Agency Productivity.
The Growth and Performance Standards study is unique because the comparison standards are based on agency size and region, as well as national results. In addition, agencies can compare to peer groups classified by metro area size or concentration in either commercial or personal lines.
GPS helps agency individuals answer the following types of questions:
• What is the standard account retention rate?
• How fast are the top agencies growing?
• Has profitability changed in recent years?
• How financially strong is my agency?
• Is my agency under or overstaffed?
• How productive are my employees?
Agencies use the GPS study to set a course for improved growth, profitability, and productivity. By comparing to industry norms and noting where significant variances occur, agencies can pinpoint the areas where they excel, and note those that need most improvement. Included within the GPS study is an Agency Planning Guide for setting future goals and benchmarks, and monitoring progress along the way.
The Academy of Producer Insurance Studies is affiliated with the National Alliance for Insurance Education & Research, www.scic.com.
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