Benchmarking Data for Brokerage Operations
Survey responses suggest how The Council’s member firms operate today and where they’re headed.
This summer, The Council introduced a new benchmarking survey aimed at providing its member firms with objective performance measures with which to compare their own growth trajectories, organizational structures, and operational challenges.
The survey addresses operational areas such as organic growth, structure, staffing, and budget allocations.
A total of 135 professionals from various roles within The Council’s membership—CEO, CFO, COO, CIO, claims and risk, HR, legal, and marketing and communications—participated in the survey. This report presents a subset of the data from firms and agencies with annual revenues under $500 million.
Respondent Demographics
- Just over half of the 135 respondents report annual revenue between $50 million and $499 million, with most between $100 million and $499 million.
- One-quarter report full-time employee counts of 1,000-4,999, and almost as many fall in the 200-499 range.
- Two-thirds of responses are from privately held firms.
- The legal structure of firms is primarily C Corporation (38%), S Corporation (31%), and LLC (25%).
Distribution Of Growth, Revenue, And Account Sizes
Property and casualty (P&C) continues to account for most revenue among brokers of this size, representing on average over 55% of total current agency revenue, followed by employee benefits (EB) at about 24% and personal lines at 11%.
Reporting firms estimated their organic growth in the insurance brokerage industry for fiscal year 2023, with organic growth defined as increases in revenue, market share, or client base derived from internal efforts rather than acquisitions, mergers, or lift outs. Overall, 48% of responding firms indicated a 2023 organic growth rate between 8 and 14%.
In terms of producer-generated revenue, across all firm sizes and both industry segments, the majority of producers generate over $500,000 in revenue, with larger firms generally having a higher percentage of producers in that revenue bracket. Smaller firms show more producers in the lower revenue brackets.
Talent Management
One of the most pressing challenges facing brokerage firms is talent management, including acquisition and retention. While 76% of respondent firms have formal internship programs—a positive sign for cultivating new talent— over half indicated they continue to focus on recruiting experienced hires. With 35% of firms anticipating a leadership change within the next five years, a well-planned succession strategy will be required for long-term perpetuation.
Respondents reported that 61% of employee turnover is voluntary, indicating a competitive job market. Firms must continue to focus on retention strategies, particularly with data showing the most significant turnover in service staff (where the total average turnover rate in 2023 was over 23%).
When asked about producer hiring practices over the past three years, firms across all responding revenue segments reported hiring 16 producers annually, on average. In terms of the experience levels of new hires, responses varied, with 18 firms stating that no more than 25% of new hires have fewer than three years of experience and 16 firms reporting over 50% of new hires have fewer than three years of experience. This split indicates that those 18 firms lean toward more experienced hires, while the 16 firms are actively investing in early career professionals.
The firms reporting that over 50% of their new hires have less than three years of experience are likely placing more emphasis on developing talent internally. This highlights a strategic investment in the future workforce, anticipating longer-term gains. The 18 firms with fewer inexperienced hires could be prioritizing attracting experienced and/or specialized professionals to fill immediate skill gaps. This could indicate a more short-term approach to talent management, focusing on immediate productivity.
Just under half of the overall producer population falls within the 40-59 age category, so succession planning and mentorship will be critical to sustaining long-term growth. The majority (79%) of respondents state the average time to producer validation is three to four years, consistent with historical industry averages.
Compensation
Data on compensation suggests that current P&C and EB renewal commissions cluster between 25% and 34% of written premium, with a smaller percentage of firms offering higher-than-average commissions. Personal lines, on the other hand, shows a more conservative commission structure, with most firms offering less than 25%, suggesting potentially lower profitability or less aggressive commission structures in that segment. The average commission paid on renewals is 27% for both property and casualty and employee benefits, and 17% for personal lines.
Budgets Allocation & Expenses
On average, firms currently allocate 77% of their real estate spend toward owning property, with only 23% going to leasing.
However, expectations around future space requirements are mixed: one-third of firms anticipate an increase in total square footage per employee over the next two years, while slightly more expect a decrease and one-fourth foresee no change. These varying forecasts reflect the ongoing evolution of work environments, particularly with the rise of hybrid and remote work models.
The breakdown of average budget allocations reveals the relative priority that organizations place on various functions. The IT department’s leading allocation highlights a strong focus on technology and infrastructure, likely due to the increasing digital demands on organizations.
Lower percentages for recruiting and legal suggest that companies might be managing these functions more conservatively or efficiently, focusing more on technology and business expansion.
