Third quarter growth rates for independent insurers and brokers are below what was forecast earlier this year, but that hasn’t stopped industry professionals from anticipating continued growth by the end of the fiscal year.
The median organic growth of insurance agents and brokers was at 6%, down 0.8% from last year’s quarter-three ending numbers, but up 0.2% from last quarter, according to the Reagan Consulting Organic Growth and Profitability (OGP) survey.
Industry members projected that organic growth would be at 7% by this time of year, but many think that the softening of the insurance market may have something to do with the slow growth.
President of Reagan Consulting, Kevin Stipe, said that the year hasn’t been “spectacular” for agents or brokers. “Organic growth is a bit slower than a year ago, and concerns about a softening market in commercial property and casualty insurance are building,” Stipe said in a press release.
If brokers and agents are able to meet their projected rate by the end of the fourth quarter, it would be the highest level in the OGP’s history, according to Reagan Consulting officials.
“Despite falling short of 7% in each of the first three quarters, brokers are holding to their 7% for the year,” Stipe said. “We hope their optimism proves to be well-founded.”
Although, brokers’ profit margins, measured by EBITDA (earnings before interest, taxes, depreciation and amortization), are at 22.4%, 1.3% higher than last year at the same time, according to the report.
Profit margins have historically dropped during fourth quarter earnings, but brokers are still expecting that fourth quarter margins will top at 20%, another first in OGP history.