Benchmarks · Notes
How do I calculate organic growth for my insurance agency?
Short answerOrganic growth is the percentage change in an agency's recurring commission and fee revenue from one year to the next, with books bought or sold and contingent income taken out. Take this year's commissions and fees, less revenue from recently bought books and contingents, divide by last year's, less revenue from sold books and contingents, and subtract one. A fictional agency with $2,280,000 last year and $2,520,000 this year on that basis grew 10.5% organically, while its income statement showed 15%.
John RanieriFounder & Product Lead, Keelridge SoftwareNovember 12, 2026 · 7 min read
How do you calculate organic growth?
Organic growth = (this year's commissions and fees − revenue from recently bought books − contingents) ÷ (last year's commissions and fees − revenue from sold books − contingents) − 1.
Use revenue after commissions paid to outside brokers, in both years. If you sold a book partway through this year, take its revenue out of this year as well.
Example, a fictional agency with no brokerage and no sales: last year it earned $2,400,000 in commissions and fees, including $120,000 in contingents. This year it earned $2,760,000, including $90,000 in contingents and $150,000 from a book it bought in March. Last year without contingents: $2,280,000. This year without contingents or the bought book: $2,520,000. Organic growth: $2,520,000 ÷ $2,280,000 − 1 = 10.5%.
On the income statement, revenue grew 15%. Organic growth, the figure buyers, bankers and peer studies use, is 10.5%. Try your own numbers in the organic growth calculator.
What does organic growth measure?
It measures how much the agency grew from the business it already had and the business it sold itself. The Big “I” and Reagan Consulting Best Practices guide defines it as year-over-year growth with acquisitions and divestitures taken out, and with contingent, investment and miscellaneous income taken out too. What is left is recurring commission and fee revenue, compared year on year.
That makes it the one growth number you can compare with another agency's, or with your own agency before and after a purchase. Total revenue growth can't do that: a single acquisition, or a good contingent year, can move it by more than a year of selling.
What do you include and what do you exclude?
| Item | Include or exclude | Why |
|---|---|---|
| New and renewal commissions, agency-bill and direct-bill | Include | This is the core of the number |
| Agency fees (service, broker or consulting fees) | Include | The industry measures commissions and fees. Count them the same way in both years |
| Commissions you pay to outside brokers | Subtract in both years | The Best Practices Study measures net revenue: what the agency keeps |
| Contingent, profit-sharing and bonus commissions | Exclude | They depend on carriers' loss results and swing from year to year, not on how much business you wrote or kept |
| Investment and interest income, other miscellaneous income | Exclude | Not earned from your book |
| A book you bought | Exclude until you've owned it a full year | Count its revenue only for months you also owned it a year earlier. A book bought last July: leave out its January-to-June revenue this year |
| A book you sold | Remove from both years | Take its revenue out of last year, and out of this year if you sold it partway through, so the sale doesn't read as shrinkage |
| Clients you lost in the ordinary way | Leave in | Losing clients is part of organic growth. Adding them back would hide it |
| Rate increases and exposure growth (payroll, sales, vehicles, values) | Leave in, but look beneath it | The standard number includes them. That is why a hard market flatters everyone's organic growth |
| A producer's book that arrived with a new hire | Your call: be consistent | If the agency paid for it, treat it as bought. If not, many agencies count it as new business. Write the rule down and keep it |
What are the common mistakes when calculating organic growth?
- Leaving contingents in. A good loss year at one carrier can add several points of growth that won't come back next year. Take them out of both years.
- Counting a bought book as growth. Revenue from a bought book is acquired growth until you can compare it with the same months a year earlier. Bought in March? Leave out its revenue this year. Bought last July? Leave out this year's January to June.
- Forgetting a book you sold. If last year's revenue includes a book you no longer own, your growth looks worse than it is. Remove it from both years.
- Using premium instead of revenue. Written or in-force premium from your AMS answers a different question. Commission rates, commission splits and the mix of lines all change how much of that premium becomes revenue. The Best Practices figures are on revenue.
- Comparing uneven periods. Use the same twelve months a year apart, on the same accounting basis. A late commission posting or a direct-bill statement that lands in the wrong month can move the result by a point or more. Trailing twelve months, run every month, smooths that out.
- Calling it all sales. Organic growth includes the rate increases carriers took. MarshBerry estimated that about seven points of the average firm's 10.2% organic growth in 2023 came from rate and exposure on the existing book, not from new business. Before you credit your producers, see how to tell growth from rate increases.
- Counting a carrier switch as a loss and a new sale. Moving a client to another carrier at renewal is neither. Counted both ways, it inflates new business and losses alike; see why moved policies inflate your new business number.
What is a good organic growth rate for an insurance agency in 2026?
Use these as context, not targets. Each comes from a different group of agencies and a different period. Benchmarks checked November 11, 2026.
| Source (released) | Who is measured | Organic growth |
|---|---|---|
| Big “I” / Reagan Best Practices Study 2026 update (Aug 12, 2026) | Nominated, high-performing agencies, by revenue band | 6.2% to 10.2% across the revenue bands, down from 8.7% to 11.3% a year earlier; slower in six of seven bands |
| Big “I” / Reagan Best Practices Study 2025 (Aug 12, 2025) | The same kind of agencies | 10.7% overall, then a record high |
| Reagan Consulting quarterly Growth and Profitability Survey, reported by Insurance Journal and Intelligent Insurer, May 18, 2026 | Independent agencies and brokers | 7.1% average in Q4 2025, down from a peak of 11.2% in Q2 2023; a preliminary Q1 2026 reading of about 5.9% |
How should you read those benchmarks?
- The market is slowing. As carriers' rate increases ease, the growth they carried goes with them. A drop from 10% to 6% may mean your sales engine held steady while rate faded.
- Compare like with like. The Best Practices figures are for top-performing agencies in your revenue band. An agency matching them is doing well, not average.
- Read growth beside profit. The Best Practices Study's Rule of 20 adds organic growth to half your pro forma EBITDA margin (after normalizing owner pay and one-off items). Twenty or more is the mark of a top-performing agency. A 6% grower with a 30% margin scores 21; a 12% grower with a 10% margin scores 17.
How does Keelridge show organic growth?
Keelridge compares your organic growth and Rule of 20 with the Big “I” / Reagan Best Practices Study figures for your revenue band. When a full prior year is missing, it leaves out the growth figures and the Rule of 20 and says why. Contingency commissions can be switched on or off, and each bought book the agency records gets its own analysis, with an estimated payback once its price and date are recorded. Each month, the Monthly brief ranks what to decide, each issue with the profit, plan or book story behind it.
How do you see what's beneath the number?
Organic growth tells you how much revenue grew. It doesn't tell you why. For that, compare your book at two dates and separate the premium that left with lost clients, the price change on what renewed, and new business. Our guide to growth vs rate increases shows how, and premium retention vs client retention covers the retention half. If you bought a book recently, did the acquisition pay for itself? covers it on its own terms.
Sources used for the industry context
- Big “I” and Reagan Consulting: Best Practices Foundations: Growth (January 2022)Public guide defining organic growth, the rate, retention, exposure and new-business effects within it, and the Rule of 20.
- Big “I”: Big “I” and Reagan Consulting Release 2026 Best Practices Study Update (Aug 12, 2026)Organic growth of 6.2% to 10.2% across revenue bands, and the year-earlier range.
- IA Magazine: Big “I” and Reagan Consulting Release 2025 Best Practices Study (Aug 12, 2025)The 2025 study's 10.7% organic growth.
- Insurance Journal: As Organic Growth Rate Slows, Consultant Urges Agents and Brokers to Embrace Tech (May 18, 2026)Reagan Consulting's quarterly survey: 7.1% average organic growth in Q4 2025.
- Intelligent Insurer: US retail broker growth hits 5.9% as soft market bites (May 18, 2026)A preliminary Q1 2026 reading of about 5.9%.
- MarshBerry: Achieving “Real” Organic Growth Through True Value Creation (2024)Rate and exposure on the existing book within reported organic growth.