Independent insurance agents and brokers reported median organicgrowth of 5.8% for second-quarter 2014, downfrom 6.2% for the first quarter of 2014 and 6.9% for thesecond quarter of 2013, as measured by the Reagan Consulting Organic Growth and Profitability (OGP)survey.

The quarterly survey of 150 midsized and large agencies andbrokerages found that profit margins, as measured by median EBITDA(earnings before interest, taxes, depreciation and amortization),increased to 24.5% in Q2 2014 from 24% in Q2 2013. ReaganConsulting pointed out that EBITDA margins are inflated bycash-basis contingent income received during the first half of theyear and tend to decline during the second half. Thus,while second-quarter results are not a prediction of year-endEBITDA margins, the comparison to prior-year second-quarter resultsis revealing.

Softening growth has not negatively affected profitability dueto continued growth in contingent income, says Reagan partner KevinStipe, CPCU. “P&C contingent growth, for both commercial andpersonal lines, has delivered double-digit growth for two years.This has allowed for the impressive improvements in agencyprofitability,” he says.

Other key findings:

• Commercial property-casualty growth led the way for the thirdconsecutive year, with a Q2 growth rate of 6.6%, compared with8.2% in Q2 2013.
• Benefits growth, at 4.6%, declined from the 5.5% growth rate ofQ2 2013.
• Personal lines growth was 2.2% compared with 3.5% in Q22013.

For information on participating in the OGP survey, contactMichelle Appelbaum at 404-233-5545 or at [email protected].