Reagan Consulting: Brokers ended 2024 with 9% organic growth

By Isha Marathe

Feb 19 - (The Insurer) - Brokers are optimistic about achieving 10% organic growth by the end of 2025, according to Reagan Consulting's growth and profitability survey (GPS).

“For the first time in GPS history, commercial, personal, and benefits lines all achieved more than 7% median organic growth, balancing success in 2024 across all lines of business,” said Harrison Brooks, Reagan Consulting partner.

For the first time since GPS launched in 2008, personal lines outperformed all other lines in Q4, with 9.2% growth.

But Reagan Consulting said personal lines losses are in the pipeline largely due to the Southern California wildfires that ravaged the state in January. Q4 personal lines rates are already beginning to reflect the impact of hurricanes Helene and Milton, with combined damages expected to exceed $100bn.

“Carriers are reassessing their risk appetite, potentially limiting available capacity,” Brooks said.

“This gives brokers the opportunity to help their clients and other insureds navigate the market, rebuild lives, and review their future insurance coverage.”

He added: "Double-digit organic growth is becoming the expectation rather than the exception for today’s industry-leading brokers."

Commercial and employee benefits

In Q3 of 2024, premiums for commercial accounts of all sizes rose 5.1%, extending the current hard market to seven years. But growth within commercial lines slowed from 10.9% in 2023 to 8.3% in 2024 due to continued moderation in premium increases, Reagan Consulting said.

Employee benefits grew at 7.6%, which is the highest Q4 growth in the segment in 16 years. Additionally, profitability in the benefits segment increased.

“Group benefits growth seems to have been driven by a continued uptick in employer-sponsored health insurance costs,” Brooks said. “For the second year, benefits premiums increased by 6.7% compared to previous annual increases of less than 5%.”

Like Q4 2023, broker profitability held at 24% EBITDA margins in Q4 2024, representing a 17-year high.

“Carriers experienced high loss ratios from natural disasters and significant losses,” Brooks said.

“And brokers felt this pain too. Brokers were able to keep these high EBITDA margins by maintaining staff levels and asking their folks to utilise technology more frequently and efficiently.”