The latest edition of the Growth and Performance Standards (GPS) study by the Austin, Texas-based National Alliance Research Academy has just been released, giving the insurance industry some new benchmarks for comparing independent agency performance trends. The GPS has been setting comparison standards for the industry since publication of the first edition in 1988.
Some important information surfaced from this new study:
–Average growth in total agency revenues is 10 percent.
–Eight percent of all surveyed agencies purchased or merged with another agency within the past year.
–Average pre-tax profit is 11.58 percent, up from 9.80 percent in 2003.
–Average agency revenues per person increased 29 percent from 2003.
–Average commercial lines commission per account is $1,266, up from $886 in 2003.
–Personal lines CSRs handle an average of $149,224 in commission, a 15 percent increase from 2003.
Independent insurance agency owners use the results of the GPS study to compare their agency’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 top 25 percent best performing agencies.
The GPS study provides comparison benchmarks for:
–Agency profile standards
–Income and expense averages
–Balance sheet ratios
–Agency productivity measures
A CD that allows agencies to input their own financial numbers produces variance reports comparing agency results to the GPS standards.
Comparison standards in the Growth and Performance Standards study are based on agency size and region, as well as national results.
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.
Growth and Performance Standards (GPS) study is available for purchase for $75 plus $5 shipping and handling. To order, go to: www.TheNationalAlliance.com/publications, or call 800-633-2165. Contact: Tanya Deocampo, firstname.lastname@example.org.
Source: The National Alliance
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