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Agent-broker organic growth weakening: Reagan

Reagan Consulting survey shows levels at 5.8% for Q2 2014, compared with 6.9% in Q2 2013.

By Laura Mazzuca Toops | Updated on August 05, 2014

Independent insurance agents and brokers reported median organic growth of 5.8% for second-quarter 2014, down from 6.2% for the first quarter of 2014 and 6.9% for the second quarter of 2013, as measured by the Reagan Consulting Organic Growth and Profitability (OGP) survey.

The quarterly survey of 150 midsized and large agencies and brokerages found that profit margins, as measured by median EBITDA (earnings before interest, taxes, depreciation and amortization), increased to 24.5% in Q2 2014 from 24% in Q2 2013. Reagan Consulting pointed out that EBITDA margins are inflated by cash-basis contingent income received during the first half of the year and tend to decline during the second half. Thus, while second-quarter results are not a prediction of year-end EBITDA margins, the comparison to prior-year second-quarter results is revealing.

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