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Big "I" Releases 2008 Best Practices Study Update

Agencies Continue to Cautiously Grow Despite Shaky Economy

(ALEXANDRIA, VA, Oct. 8, 2008)—The Independent Insurance Agents & Brokers of America (the Big “I”) announced today the release of its annual Best Practices Study.  The independent study includes the “Rule of 20” statistic which provides a quick means of calculating whether or not an agency creates value for its shareholders.

“This year’s study indicates that the Best Practices Agencies are proactively taking steps to grow even in a very soft market and during tough economic times,” says Madelyn Flannagan, Big
“I” vice president for education and research.  

Although positive revenue growth was difficult to achieve, Best Practices agencies continued to invest in new production talent.  The majority of those agencies with revenues over $2.5 million hired at least 1.5 new producers during the last fiscal year, with the largest agencies hiring an average of 9.4 new producers.  The average starting salary across all the revenue categories ranged from $52,000 to $95,000.  The largest agencies, those with revenues over $25 million, tended to hire more experienced producers while those in the lower revenue categories tended to hire producers with less sales and/or insurance experience.

The “Rule of 20”, a new benchmark introduced last year, is a quick means of calculating whether or not an agency is creating significant returns for its shareholders.  The outcome is equal to the agency’s Pro Forma EBITDA X 50% + Organic Growth Rate.  Generally speaking, an outcome of 20 or higher means an agency is generating a shareholder return that is equal to or greater than that typically expected of an insurance agency/brokerage.  A score of less than 20 indicates room for improvement.  This year’s outcomes reflect the severity of the soft market over the past year.

Positive organic growth was difficult to achieve for most agencies and shareholder returns were adversely impacted.  Only one study group, the $1.25 - $2.5 million revenue group, achieved a “Rule of 20” outcome greater than 20, the desired threshold. 

The leading agencies included in the annual study must be nominated for participation.  Once every three years, the Big “I” asks its insurance company partners, state association affiliates and other industry organizations to nominate those agencies they believe to be among the most efficient and high performing agencies in the industry for each of the studies’ revenue categories. These agencies are asked to submit operational information in many areas.  This information is carefully evaluated and ranked, culminating in the choice of the top 30 agencies in each revenue category earning the status of “Best Practices Agency.” Participation in the Best Practices Study has become a prestigious recognition for the top insurance agencies in the United States.

This year’s study shows overall that agencies are doing much more with fewer people, and the organic growth rate was much stronger than expected.  When asked the reason for their success, the new crop of Best Practices agencies said, overwhelmingly, regardless of agency size, “the quality of our people.” This quality can be defined as a strong work ethic, expert knowledge in agency products and services, as well as a high ethical standards and dedication.  These factors coupled with advanced proficiency in agency technology allowed the 2008 Best Practices Agencies to push productivity levels higher than ever.

The study and a listing of the 2008 Best Practices Agencies can be accessed at and or directly at  Through this site you can also view an HTML version of the current and past Executive Updates; download a Best Practices comparison spreadsheet to compare your agency’s year-end results with the study’s results; access other Best Practices studies, tools, and products and download order forms.

The annual Best Practices Study originated in 1993 as an initiative by the Big “I” to help its members build and maintain the value of their most important assets-their agencies.  By studying the leading agencies and brokers in the country, the association hoped to provide member agents with meaningful performance benchmarks and business strategies that can be adopted or adapted for use in improving agency performance, thus enhancing agency value.  The Big “I” retained the principals of Reagan Consulting to create and perform the first Best Practices Study.  Annual updates conducted by Reagan Consulting continue to provide important financial and operational benchmarks, and the study is recognized as one of the most thoughtful, effective and valuable resources available to the industry.

Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, and health—as well as employee benefit plans and retirement products. Web address:


​127 South Peyton Street
Alexandria VA 22314
​phone: 800.221.7917
fax: 703.683.7556

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