Median organic revenue growth reached 6.9 percent in the second quarter of 2013 for mid-size and large privately held insurance agencies and brokerage firms, the highest recorded in Reagan Consulting's Organic Growth and Profitability (OGP) survey, which began in 2008.
The Reagan Consulting survey also showed that the agent-broker profitability margin of 24.0 percent was the highest recorded since the survey began in 2008.
Reagan Consulting, a management consulting and merger-and-acquisition advisory firm for the insurance distribution system, has conducted its quarterly survey of privately held insurance agency growth and profitability since 2008, using confidential submissions from approximately 125 mid-size and large agencies and brokerage firms.
Other survey findings include:
-- Privately-held firms held a growth advantage over public brokers, growing 1.6 percent faster than the public brokers' 5.3 percent average rate, as measured by reported results for five large publicly held brokerage firms.
-- Commercial lines grew at an 8.2 percent median rate through the first half of the year, up 1.4 percent from 6.8 percent in the first quarter of 2013.
-- The 2Q OGP survey found that agents and brokers, after a strong first-half performance, have increased their full-year 2013 organic growth projection to 7.0 percent.
While profitability in the second quarter is inflated by the cash-basis recognition of contingent income typically received in the first half, Reagan noted that the earnings trend is strong nonetheless. The survey measures profitability in terms of EBITDA (earnings before interest, taxes depreciation and amortization).
Median revenue of the firms completing the survey is approximately $15 million, making it the industry's preeminent survey of mid-size and large privately held brokers.
Each participating agency receives a customized, confidential report of its performance compared with the overall survey results, as well as Reagan's quarterly commentary of industry trends impacting agents and brokers. For information on participating in the OGP survey, contact Michelle Appelbaum at (404) 233-5545 or by email to michelle@ReaganConsulting.com.
About Reagan Consulting:
Reagan Consulting is a management consulting firm providing strategic consulting, valuation, and merger-and-acquisition (M&A) services to the independent insurance distribution system. The firm's services for publicly owned and privately held independent insurance agents and brokers, bank-owned agencies, and other participants in insurance distribution marketplace include: appraisals of fair market value, mergers and acquisitions advisory, ownership perpetuation planning, strategic business planning and consulting, financial reviews, services for key employee compensation and equity plans, and agency performance analysis.