Times are good for independent insurance agents and brokers, according to a study released by Reagan Consulting, a firm that provides strategic advice to the independent insurance industry.
"Industry organic growth has now been in a relatively tight band of 5 percent to 7 percent for 14 consecutive quarters," commented Kevin Stipe, president of Reagan Consulting, a management consulting and merger-and-acquisition advisory firm for the insurance distribution system. "Times are good for insurance brokers."
A quarterly survey of 130 mid-sized and large-sized agencies and brokerage firms showed a median organic growth rate of 5.9 percent among agents and brokers. It marks the 14th consecutive quarter in which growth has been between 5 percent and 7 percent, an indication of the industry's stability.
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The survey also displayed a median profitability of 24.6 percent among agents and brokers, the highest level Reagan has encountered since it began conducting the quarterly survey in 2008.
Growth was particularly strong for group benefits, which for the first time in four years exceeded growth from commercial lines. Reagan predicts that softening prices in the commercial property and casualty market suggests growth from commercial lines will start to slow down. Because two-thirds of revenue for mid-sized and large firms comes from commercial lines, any slowdown in that category will likely be a serious barrier to overall future growth in the industry.
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