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Big "I" Study Finds Large Agencies Continue Hiring Producers

Releases 2009 Best Practices Study Results

ALEXANDRIA, VA, Sept. 30, 2009—The Independent Insurance Agents & Brokers of America (the Big “I”) announced today the release of its Best Practices Study which found that, despite high national unemployment numbers, large agencies increased their employee “headcounts.”

“This year’s study indicates that the Best Practices Agencies, overall, continue to perform well, despite facing some challenges in soft market conditions,” says Madelyn Flannagan, Big “I” vice president of agent development, education and research. “As expected, overall organic growth was down significantly again this year but was buoyed by positive growth in both Personal P&C and Group L&H. This trend continues from 2007 when we began to study the current group of Best Practices Agencies.” 

Employee numbers or “headcounts” are an important factor in profitability and since its inception the study has reported a continuous drop in agency head counts numbers. Surprisingly, this year’s study shows that the total number of employees reported remained steady in agencies with revenues under $5 million and increased by an average of four people in agencies with revenue agencies over $5 million.

The “Rule of 20”, a new benchmark introduced in 2007, is a quick way to calculate 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. In general, 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.

The average “Rule of 20” score fell significantly since 2007.  For smaller agencies, it dropped from an average score of 25.6 to 14.4 and for larger agencies from 24.2 to 13.4. A score of 20 or more means an agency is generating a shareholder return of 15%-16%, which is viewed as the “expected” rate of return for a well-run agency.     

“The new commissions produced per validate Commercial Lines producer was down across the board in all agency size categories,” continued Flannagan. “Given the soft market, this was not a surprise and may be a factor in the increase of multi-line producers in the larger agencies.”

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.

Best Practices Study compiles the year-end results of the participants’ most recently completed fiscal year end. Ninety-five percent of the 2009 Best Practices Agencies have 12/31/2008 fiscal year ends.

The study and a listing of the 2009 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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