Reagan & Associates of Atlanta, Georgia, recently reported that during the 2nd quarter of 2013 mid-size and large privately held insurance agencies experienced the most significant growth in median organic revenue since 2008. They also reported that the profitability margin of these agencies was the highest since 2008.
Because as Kevin Stipe, President of Reagan Consulting, noted the economy is growing and the P&C market is firming. He observed that Commercial Lines growth was 8.2% while Personal Lines was 3.5%. He also noted something else that is critically important. “At some level, the firms that consistently provide numbers to the survey are a little more concerned with benchmarks, Stipe said. “They want to measure their results. The fact that they’re measuring results means they might be doing a better job than the average agency, simply because they’re more focused on growth.
So, what can we learn from this? Three things stand out to me:
Market conditions and the economy favor premium growth. This is good for agencies with existing books of business. (It also means more people will be shopping their insurance to control costs, which is good for a growth-focused agency).
Agencies who benchmark (measure their results against peer agencies) tend to outperform others. This happens because
They are focused on growth.
This is all great news for agencies with marketing and selling plans who are actively looking for new customers. It is really good news for Commercial Lines focused agencies. Is it good news for you or do you have work to do?