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Digital EditionInsurance Agencies Achieve Record Growth Despite Market Headwinds
Independent insurance agencies designated as Best Practices firms delivered exceptional performance in 2025, achieving record-high organic growth of 10.7% while maintaining profit margins near historic peaks, according to the latest benchmarking study by the Big “I” and Reagan Consulting.
Over 1,100 independent agencies throughout the U.S. were nominated to participate in the annual Best Practices Study, according to the 2025 report. From these, 349 of the nominated agencies qualified and were designated as Best Practices agencies. Their results results serve as the foundation for the 2025 report, and will be analyzed for the next two years of the Best Practices Study.
“Despite some market headwinds, Best Practices agencies delivered another year of excellent results,” says Charles Symington, Big “I” president and CEO. The study analyzed agencies across expanded revenue categories, including new segments for larger agencies with $25-$100 million and those exceeding $100 million in revenue.
In addition to the strong overall organic growth rate, driven primarily by robust expansion in personal property and casualty lines as well as group benefits, EBITDA margins held steady at 26.1%, falling just short of 2024’s record-setting 26.3%, according to the study report.
The Rule of 20 — a composite metric of agency health combining organic growth with half of pro forma EBITDA — achieved an all-time high of 25.1. This metric underscores the exceptional financial position of leading agencies in the current market environment.
Sales velocity remained robust across all revenue categories, exceeding the critical 12%-13% threshold that indicates a healthy sales culture, according to the report.
Mixed Signals Across Business Lines
While overall growth remained strong, performance varied significantly by line of business and agency size. Commercial property and casualty revenue growth decelerated across most revenue categories as the rate environment began moderating. The lone exception was agencies in the $1.25-$2.5 million revenue range, which continued to see higher growth in commercial lines.
Firms with revenues of $5-$10 million reported the highest organic growth rate for 2025 of 11.3%, unchanged from 2024. These were followed by forms with $2.5 – $5 million in revenue, with 10.$ organic growth, down from 11.7% a year ago. The lowest growth rate was among firms with $10-$25 million in revenues, where organic growth was 8.7%, down from 10.4%.
Personal lines and group benefits emerged as the primary growth engines, offsetting a slowdown in commercial lines, the report said. This shift reflects broader market dynamics as rate increases that fueled commercial growth in recent years begin to stabilize.
“P&C rate cooled materially versus the prior year,” the report’s authors noted. “Although 2024 was still a hard market year, continued market softening may be an indication that the overall growth environment will become more challenging.”
Investment in Future Growth Continues
Best Practices agencies maintained their focus on long-term growth through continued investment in producer development, the study found. A metric called NUPP, or Net Unvalidated Producer Payroll, analyzes the compensation for producers in development compared with what they would earn under a regular commission schedule. NUPP held steady at 2.0%, compared to 1.9% in 2024, indicating agencies are appropriately reinvesting in future revenue generators. This level falls within the healthy range of 1.5%-2.0% that industry experts recommend.
Revenue productivity also improved, with revenue per employee climbing to $228,321. However, the productivity gains from higher revenue per employee did not translate to record profitability due to significant increases in average compensation per employee, the report said.
Learn more about the 2025 Best Practices study here. &
