Organic growth at US private agencies slowed to 9% in Q4 from 9.4% in Q3 and 10.3% in the prior year period, as 2024 full year expansion averaged 9%, according to Reagan Consulting’s latest quarterly growth and profitability survey (GPS) reviewed by Insurance Insider US.
Private retail brokers anticipate 10% for this year’s organic growth, the highest projection in Reagan’s GPS since the metric was first captured in 2010.
Top performers forecast 12% organic growth in 2025, while agencies in the bottom quartile expect organic growth of around 6.4%.
The optimism for 2025 among private agencies is noteworthy given that the market is expected to soften after years of hardening pricing.
Yet, some agencies are capitalizing on technology investments and certain classes such as personal lines or casualty, which are experiencing their own micro-cycles, to deliver strong growth.
“Double-digit organic growth is becoming the expectation rather than the exception for today’s industry-leading brokers,” the report reads.
Personal lines organic growth decelerated to 9.2% in Q4 from 10.3% in the prior year period, while commercial P&C slowed to 8.3% from 10.9% in Q4 2023, mostly driven by premium moderation.
The advisory firm reported that in 2024 personal lines growth outperformed commercial P&C and employee benefits for the first time since Reagan launched the GPS study in 2008.
Reagan noted that last year’s sales velocity – a benchmark of agencies’ new business results – averaged 11.7%, with top performers reporting 15.7%.
Sales velocity across top quartile brokers remained steady from 15.7% seen in 2023 but rose from 15.4% in 2022 and 15% in 2021.
The consulting firm noted that, based on 2024 performance, sustaining 15% sales velocity is a goal for brokers to help ensure double-digit organic growth even if the market softens.
Profitability
US private brokers reported average Ebitda margins of 23.6%, in line with results seen in 2023.
Personal lines agencies reported Ebitda margins of 27.2% last year, above those of commercial P&C and employee benefits.
Reagan said that brokers are navigating the hard personal lines market with the same staff levels, utilizing technology more frequently and efficiently.
In addition, personal lines in certain geographies such as California are expected to continue to see high rates given recent cat losses.
Last year, Ebitda margins for agencies with $25mn+ revenues averaged 21.7%, while firms with $10mn-$25mn in revenues booked 25.3% margins and agents with top line below $10mn recorded 22.9% Ebitda margins.
Meanwhile, the top 2024 performers reported a median Ebitda margin of 28.5%.
Median margin for personal lines was 27.2%, while commercial P&C reported 23.9% and employee benefits 18.3%.
For this year, US agencies forecast Ebitda margins of 22%, with top performers expecting 28.5%.
Over 190 agencies participated in Reagan’s Q4 GPS with median annual revenues of roughly $16.6mn.