Big ‘I’ and Reagan Consulting Release 2022 Best Practices Study Results – IA Magazine

What Is the Best Practices Study, and Why Does Everyone Treat It Like Agency Gospel?

The Best Practices Study is a long-running benchmarking project created by the Independent Insurance Agents & Brokers of America (the Big “I”) and Reagan Consulting. It exists for one reason: to identify what top independent agencies do differentlyand to translate that into measurable performance standards other agencies can use.

Think of it as a fitness tracker for agencies. Not the kind that nags you about steps, but the kind that tells you exactly where you’re strong, where you’re leaking profit, and whether your “growth” is realor just the hard market doing the heavy lifting.

Agencies are evaluated in revenue categories so comparisons stay fair (“apples to apples,” not “apples to aircraft carriers”). The 2022 results shared in IA Magazine are part of a multi-year cycle that examines newly qualified Best Practices Agencies and tracks their performance with deep financial and operational data.

The 2022 Best Practices Study Results in One Fast, Useful Table

Here are the headline metrics that made agency leaders sit up straighter in their ergonomic chairs:

The punchline: the best agencies weren’t just “doing fine.” They were setting recordsand the study explains how.

Record Organic Growth: 9.2% (Yes, That’s the Kind You Actually Want)

Organic growth hit 9.2%, a record in the study’s results shared by IA Magazine. Organic growth matters because it’s the part of growth you can build intentionally: retention discipline, cross-sell programs, sales culture, niche focus, and operational consistency.

Organic Growth Isn’t One ThingIt’s Four

In practice, organic growth is pushed by a few forces: exposure changes, rate changes, retention, and new business. Two of those are mostly outside your control (exposures and rate). Two are very much on you (retention and new business).

That’s why the Best Practices data keeps pulling agencies back to the same question: “Is your growth coming from your people and process… or from the market doing you a favor?”

A Quick Example: “We Grew!” vs. “We Grew On Purpose.”

If your agency’s revenue increased 8% last year, that can feel like a winuntil you discover that rates rose, retention was flat, and new business was soft. Best Practices agencies pressure-test growth using sales velocity (more on that next), so they can separate “market tide” from “muscle.”

Sales Velocity: The Metric That Roasts Your Pipeline (In a Helpful Way)

The study reported sales velocity at 15.5%, up from 13.2%. Sales velocity is calculated by dividing new business written this year by prior-year commissions and feesexpressed as a percentage.

Why Sales Velocity Is a Big Deal

• It spotlights true selling, not just renewals riding rate increases.
• It reveals “leakage”the gap between new business written and organic growth achieved.
• It’s hard to fake. Your pipeline either creates new business or it doesn’t.

Sales Velocity Example (No Advanced Math, Promise)

If you earned $3,000,000 in commissions and fees last year and wrote $450,000 of new business this year, your sales velocity is 15%. That’s the neighborhood Best Practices agencies are living in.

If your sales velocity is low, the fix is rarely “tell producers to sell harder.” It’s usually a blend of: clearer expectations, better lead flow, improved vertical focus, stronger onboarding, more coaching, and smarter account assignmentplus the courage to address non-producing producers (the “NP2 problem,” as some consultants politely call it).

Profitability at 26.2%: The Upside (and the Trap)

Best Practices agencies posted 26.2% profitability, hovering at all-time-high territory. That’s a powerful position. High profitability can fund acquisitions, technology upgrades, talent investments, and ownership transition planning.

The Trap: High Profit Can Make You Lazy

A hard market can inflate results and make mediocre processes look “good enough.” But the study’s warnings about producer investment suggest the top agencies don’t get hypnotized by marginsthey use strong years to build resilience for the next cycle.

Expense Discipline Without Being Cheap

The study’s broader Best Practices framework looks at how agencies distribute income and expenses, how staff productivity compares, and how compensation structures support growth. The goal isn’t “cut costs until morale collapses.” It’s: spend intentionally, measure consistently, and invest where returns compound (sales capacity, retention, automation, and leadership depth).

The Rule of 20 Hit 24: A Simple Score With a Serious Message

The Rule of 20 reached a record 24. This metric is commonly defined as: organic growth + (0.5 × profitability)often framed using pro forma EBITDA margin.

What the Rule of 20 Is Really Telling You

It’s a balance test. An agency can be wildly profitable and barely growing (comfortable today, fragile tomorrow). Or it can be growing fast and losing money (exciting today, catastrophic later). The Rule of 20 is designed to reward agencies that combine the two in a way that supports strong long-term value.

A score above 20 generally signals a strong blend of growth and profitability. At 24, the top agencies weren’t just healthythey were thriving.

Mergers & Acquisitions: Growth Booster, Not a Growth Substitute

The study noted that 22.3% of Best Practices agencies acquired business (up from 16.4% previously). M&A can be a smart growth leverespecially when acquisition opportunities expand due to owner retirements and consolidation pressures.

Where Agencies Get Burned in M&A

• Overestimating retention after closing.
• Underestimating integration work (systems, service standards, carrier alignment).
• Buying revenue without sales capacitythen wondering why the team is overwhelmed.

Best Practices agencies tend to treat acquisition as an accelerator, not a life raft. Strong profitability creates the cash flow and borrowing power to buy welland invest in onboarding so the acquired book doesn’t slowly evaporate.

The Loudest Warning in the 2022 Results: Producer Recruitment & Development

Here’s the part of the release that should make every agency principal put down their coffee and pick up a pen: NUPP (Net Unvalidated Producer Payroll) sat at 1.1% of net revenues, below the “healthy” range of 1.5%–2.0%.

What NUPP Is (In Plain English)

NUPP is a way to measure how much you’re investing in producers who aren’t fully “validated” yetmeaning their books aren’t large enough to pay for themselves under your normal comp model. It’s your farm system investment.

Why This Matters More Than Ever

If you’re enjoying high profit today but not building new producers, you’re essentially eating the seed corn. It can work for a while, right up until a senior producer retires, a key account leaves, or your growth falls off a cliff and you realize your pipeline was mostly vibes.

The release frames it clearly: agencies may need to redirect a portion of record profits into new producer investment. That’s not a “nice to have.” It’s the price of staying relevant.

Ages Matter: WASA and WAPA Are the Quiet Perpetuation Alarms

The 2022 results included two age metrics: Weighted Average Shareholder Age (WASA) at 53.2 and Weighted Average Producer Age (WAPA) at 48.6.

These numbers aren’t trivia. They’re strategy. If ownership and producers skew older without a transition plan, perpetuation becomes urgentoften right when the agency is busiest and least prepared to slow down and plan.

What Healthy Agencies Do With These Numbers

• Build a multi-year ownership transition roadmap (not a “someday” wish).
• Create a producer development path with clear validation milestones.
• Develop and retain emerging leaders earlyso the agency isn’t forced into a reactive sale.

Context From the Broader Independent Agency System: Growth, Tech, and Staffing

The Best Practices Study focuses on top performersbut it lands in a wider industry context. Around the same timeframe, findings from the 2022 Agency Universe Study showed the independent channel continuing to adapt through pandemic-era disruption.

Independent Agency Count Grew

One headline finding: the estimated number of independent P&C agencies and brokerages in the U.S. reached 40,000 in 2022, up from 36,000 in 2020. The increase was driven largely by small agencies and movement from captive to independent models.

Technology Adoption Accelerated

Agencies reported expanding digital solutions, greater use of carrier mobile apps, and growing comfort with client self-service for basic functions like documents and ID cards. That’s not “tech for tech’s sake”it’s operational survival when staffing is tight and customer expectations keep rising.

Staffing and Marketing Remain Pressure Points

The Universe Study flagged staffing and marketing challengesexactly the areas where Best Practices agencies tend to be more disciplined: measurable sales activity, intentional recruiting, and investment in systems that reduce service friction.

How to Use the 2022 Best Practices Results Without Getting Overwhelmed

Here’s the simplest way to apply the insights: don’t try to fix everything. Pick a few metrics that create a cascade of improvement.

Step 1: Calculate Your Baseline

• Organic growth (and identify how much is rate vs. real change).
• Sales velocity (new business as a % of prior-year commissions and fees).
• Profitability / EBITDA margin (clean up “noise” to see true operating performance).
• NUPP (are you funding your future producers?).
• WASA/WAPA (perpetuation readiness).

Step 2: Decide What You’re Solving For

Different goals require different moves:

• If you want predictable growth: focus on sales velocity, retention, producer accountability, and niches.
• If you want higher valuation: balance growth and profitability (Rule of 20 mindset), not just margin.
• If you want longevity: build producer validation and ownership transition plans early.

Step 3: Reinvest Like You Mean It

The 2022 results basically say: “Congrats on strong profitsnow don’t waste them.” The clearest reinvestment target is talent: recruiting, training, and validating producers (plus operational support that lets producers actually sell).

Specific, Practical Examples of “Best Practices Thinking”

Example A: Fixing the “We’re Growing, But…” Problem

Your agency reports 10% revenue growth. Everyone celebrates. Then you calculate sales velocity and it’s 7%. That gap suggests you’re losing accounts, under-cross-selling, or relying on rate changes. A Best Practices move: set a sales velocity goal (by revenue category), measure monthly, and tie coaching to pipeline activitynot just outcomes.

Example B: Funding Producers Without Killing Profit

You want to hire two early-career producers, but you don’t want to torch profitability. Use NUPP as a guardrail. If your net revenue is $5,000,000, then a “healthy” NUPP range of 1.5%–2.0% implies ~$75,000–$100,000 of net investment (after subtracting what their current books would earn under normal comp). That frames the decision realistically: you’re buying future production capacity.

Example C: Using the Rule of 20 to Make Tradeoffs

Consider two options:

• Option 1: Spend on a sales enablement platform + training that could raise organic growth by 1%.
• Option 2: Cut expenses to raise profitability by 2%.

Rule of 20 thinking helps compare the value impact. If growth is weighted more heavily in long-term value creation, the “spend to grow” option may wineven if it dents margin in the short term.

So… What Should Agency Leaders Take Away From the 2022 Release?

The 2022 Best Practices Study release is both a celebration and a warning:

• Celebrate: Top independent agencies delivered record organic growth and strong profitability.
• Reality-check: A hard market can inflate results; sales velocity tells you what’s real.
• Act: Invest in producers (NUPP) and perpetuation planning (WASA/WAPA) while profits give you room to move.

In other words, the best agencies didn’t “get lucky.” They measured, managed, reinvested, and built systems that keep working when luck goes on vacation.

Bonus Add-On: Real-World “Experience” Notes Agencies Share When Applying Best Practices (500+ Words)

Below are practical lessons that consistently show up in agency case studies, benchmarking discussions, coaching programs, and the operational “war stories” leaders trade at conferencesespecially when someone admits they finally calculated sales velocity and had an emotional reaction.

1) The “Hard Market Hangover” Is Real

A common pattern: agencies feel unstoppable during a hard market because revenue climbs, but their new business engine quietly stalls. When they compute sales velocity, they discover the truth: rate helped more than selling did. The fix isn’t shameit’s structure. Agencies that rebound fastest put producers on clear activity expectations (pipeline volume, prospecting rhythm, scheduled reviews) and pair that with service workflows that protect selling time. The goal is to make new business repeatable, not heroic.

2) Retention Leaks Are Usually Process Leaks

Leaders often assume retention issues are “just price.” But the agencies that improve retention typically find operational culprits: slow certificates, inconsistent renewal reviews, lack of proactive coverage conversations, and reactive claims handling. Once they standardize renewal timelines and accountability (who contacts whom, when, and with what value message), retention rises. This matters because retention is one of the few organic growth drivers fully inside the agency’s control.

3) Producer Development Fails When It’s “Extra”

The Best Practices release highlighted NUPP underinvestment, and the real-world version looks like this: agencies hire a young producer, assign a desk, say “go sell,” and then act surprised when results lag. High-performing agencies treat producer development as a program, not a hope. They define what “validated” means (book size, activity levels, conversion targets), create a training cadence, and assign mentors. They also budget for it. NUPP is useful because it turns good intentions into a measurable commitment.

4) Overpaying Commissions Can Quietly Wreck Valuation

Agencies sometimes raise commission splits to “win recruiting,” especially in competitive labor markets. In the short term, it may land a hire. Over time, it can compress margins so badly that the agency loses the ability to fund training, marketing, tech improvements, and acquisition integration. Several industry analyses warn that growing top-line revenue without protecting operating profit eventually damages agency value. The agencies that balance comp well usually combine fair splits with clear performance expectations, defined roles (hunter vs. farmer), and support that helps producers win.

5) The Best M&A Deals Are Operational Deals

In acquisition conversations, the “math” is only half the story. Agencies that keep what they buy tend to have an onboarding plan ready before closing: client communication scripts, service assignment rules, data cleanup procedures, carrier coordination, and a schedule for renewal reviews. Without that, retention slips and the acquired revenue erodes. The common best-practice habit: treat integration as a project with owners, timelines, and measurable outcomesbecause it is.

6) Perpetuation Planning Works Best When It’s Boring

The healthiest transitions rarely look dramatic. They look methodical: leadership development, shareholder pathways, financing plans, and gradual transfer of responsibility. Agencies that wait until retirement is “soon” end up rushed, and rushed decisions are rarely the best-valued ones. Tracking WASA and WAPA keeps perpetuation in view and encourages early actionespecially when the agency is profitable enough to invest in the next generation.

The consistent theme across these lessons is simple: the Best Practices Study isn’t about copying someone else’s playbook line-by-line. It’s about using benchmarks to ask better questions, then building systems that make the answers repeatable.