Personal lines business accelerated its growth rate for the third consecutive year to 3.9%, "which… is the fastest growth rate recorded for personal lines in the 11-year history of the OGP survey," Kevin Stipe of Reagan Consulting said in a press release. (Photo: iStock)
Independent agents and brokers have a lot to look forward to in 2019. After closing the books on their best year since 2014, Reagan Consulting's Organic Growth and Profitability (OGP) survey for the fourth quarter of 2018 shows "a convergence of impressive upward trends in each major line of business," Kevin Stipe, president of the firm, said in a press release.
OGP participants generated organic growth of 6.1% in 2018, surpassing the projected organic growth rate of 5% for the year. Growth was driven by continued increases in U.S. GDP and commercial pricing. For 2019, OGP participants are forecasting growth of 7%, which would be the highest growth rate since Reagan Consulting began its quarterly OGP survey in 2008.
Related: 2019 Agent Study: Major business lines, sales goals and more
|Market growth
Employee group benefits was the channel's leading performer of 2018, growing organically at a rate of 7.3%. This growth rate was more than 2 percentage points higher than last year's. Commercial lines' growth rate also increased by more than 2 percentage points from 2017, as the median firm grew its commercial property & casualty business by 6.5% in 2018.
Personal lines business accelerated its growth rate for the third consecutive year to 3.9%, "which… is the fastest growth rate recorded for personal lines in the 11-year history of the OGP survey," Stipe said in a press release.
Buyer optimism of agent and broker performance and seller concerns of scale and internal perpetuation have fueled what Stipe characterizes as a "frenzy" of mergers and acquisitions (M&A) in 2018, much like 2017′s record-setting activity. Small agencies whose owners are facing retirement without a succession plan are also contributing to the increase in transaction count.
"Without a viable path to continued independence," these agencies turn to an M&A transaction, said Stipe.
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Denny Jacob
Denny Jacob is an associate editor for NU PropertyCasualty360. Contact him at [email protected].
