As a whole, agencies are expanding, investing in growth strategies that allow for organic growth and obtaining a competitive edge. Hiring new producers, enforcing greater producer accountability, focusing on specialty areas and expanding marketing efforts are just some of the strategies that have allowed for industry growth.

Strong revenue growth, in turn, has improved agency profitability. Results show that contingent income has grown at an average of 21.8 percent for agencies with revenues less than $5 million, and an average of 10.7 percent for revenues more than $5 million. Agencies improved in monitoring and controlling expenses, allowing operating profits to grow faster than contingent income. Additionally, agency shareholders can expect to earn 15 to 17 percent per year through stock price appreciation and shareholder distributions.

The study also revealed that many of the Best Practices agencies have plans to invest in technology in the coming year, including Internet marketing and social media efforts and agency management systems.

“The 2013 results indicate that Best Practices agencies continue to grow and increase profitability, the key components of agency value,” says Robert Rusbuldt, Big “I” president & CEO. “Overall, we are pleased, but not surprised, that the independent insurance agency system remains strong and stable.”