Organic revenue growth for large and mid-size agent-brokersslowed to 4.6% in 2015, according to Atlanta-based ReaganConsulting’s quarterly survey of the topic.

Organic growth had been 6.2% each year from 2012 through 2014,Reagan Consulting said.

Profit margins declined to 20.1%, a year after reaching recordprofitability in 2014. That median profitability, measured byearnings before interest, taxes, depreciation and amortization, was21% in 2014, according to the survey.

"The results show a downward tick. But they are still fairlysolid from a historical perspective," said Kevin Stipe, presidentof Reagan Consulting, which is a management consulting andmerger-and-acquisition advisory firm for insurance distributors."In the past eight years of the … survey, the organic growth rateof 4.6% ranks fourth best, while the EBITDA margin of 20.1% rankssecond best."

Reagan Consulting said its study also found that the pace ofgrowth had slowed in all three major lines of business: commercialproperty-casualty, personal property-casualty and employeebenefits. Three key factors affected growth and profitability: asoft market for commercial property and casualty premiums,continued slow growth in the U.S. economy of only 2.4%, and a sharpdecline in crude oil prices, Reagan Consulting said.

EBITDA: Earnings before interest, taxes, depreciation andamortization.

Source: Reagan Consulting Organic Growth and ProfitabilitySurvey.

"The boom that drove oil prices to more than $100 per barrel in2013 turned into an oil bust in 2015 with prices reaching thehigh-$30s range," said Stipe. "Insurance brokers in oil-producingstates once benefited from economic activity stimulated by high oilprices, and outpaced peers in other states. That has flipped:Oil-state firms grew at only a 2.5% rate in 2015, 2.3 percentagepoints slower than other … firms."

Reagan Consulting said it has conducted its quarterly survey ofagency growth and profitability since 2008, using submissions fromapproximately 140 mid-size and large agencies and brokerages, witharoud half of the industry's 100 largest firms participating in themost recent survey. Median revenue of the firms completing thesurvey is approximately $17 million, Reagan Consulting said.

Related: Agent, broker organic growth reaches 5.9% in Q22015

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