Why Benchmarks Decide Which Agencies Thrive

Most agency owners work 50-plus hours a week and still can't answer a simple question: are we actually profitable compared to similar agencies? That gap between gut instinct and strategic clarity is exactly what benchmarking closes. Without hard numbers, you're steering by feel - and in an industry where margins separate thriving agencies from those that quietly stagnate, feel isn't enough.

The IIABA Best Practices Study - conducted in partnership with Reagan Consulting since 1993 - now provides over 3,000 data points across seven revenue categories, making it the gold standard for insurance agency KPIs. Meanwhile, NAIC analysis reports cover statutory filings from roughly 99% of all reporting insurers, giving your agency a macro-economic backdrop against which to measure internal performance.

This article delivers the 25+ most critical insurance agency benchmarks for 2026, organized by financial performance, operational efficiency, retention, and producer productivity - with breakdowns by agency size. Whether you run a $1.2 million book or manage a $30 million operation, you'll find specific numbers to gauge where you stand and where to aim next. Agencies leveraging AI implementation and automation are already pulling ahead on several of these metrics, a trend we'll examine throughout.

Financial Benchmarks: Profitability Metrics Every Agency Must Track

Financial benchmarks form the backbone of any agency performance assessment. You can grow revenue all day long, but if profitability lags behind peers, that growth masks deeper problems. Let's break down the three profitability metrics that matter most.

EBITDA margin targets

EBITDA - earnings before interest, taxes, depreciation, and amortization - strips away financing decisions and accounting conventions to reveal your agency's core operating profitability. Think of it as the truest measure of how much cash your operations generate. A healthy EBITDA margin falls between 15% and 25%, while agencies consistently clear 25%+.

Why does this number matter so much? Because it directly drives agency valuation multiples. Acquirers price agencies as a multiple of EBITDA, so every percentage point improvement translates to real equity value. If your agency generates $5 million in revenue with a 20% EBITDA margin, that's $1 million in EBITDA. Push that to 25%, and you've added $250,000 in annual earnings - potentially $1.5 million to $2.5 million in enterprise value at typical acquisition multiples.

Pre-tax profit margin

The Best Practices Study reveals that agencies in the $5M-$10M revenue range that qualify as "Best Practices" agencies typically outperform peers by five to eight percentage points on pre-tax profit margin. Median agencies in this range hover around 15-18%, while top-quartile performers reach 22-26%.

Pre-tax profit margin includes all income sources - commission revenue, contingent income, fee income, and investment income - minus all expenses. It gives you the fullest picture of bottom-line performance before Uncle Sam takes a cut.

Operating margin vs. EBITDA: Why you need both

Operating margin excludes non-operating income like contingent commissions and investment returns. For agencies with significant contingent income (sometimes 3-5% of total revenue), tracking both metrics prevents a false sense of security. If your operating margin is 12% but your EBITDA margin is 22%, your profitability depends heavily on carrier bonus structures you don't fully control. The Best Practices Study analyzes agencies in seven revenue categories - from under $1.25M to over $100M - precisely because these margins shift dramatically with scale.

Revenue Metrics: The Numbers That Drive Growth

Revenue-per-person metrics tell you whether your team creates enough economic value to justify headcount. They also serve as early warning signals: when revenue per employee stagnates while headcount grows, trouble follows.

Revenue per employee

Target range: $150,000 to $250,000 per employee. Best Practices agencies at the higher end of the revenue scale routinely exceed $200,000 per employee, while smaller agencies often fall in the $120,000-$160,000 range. This metric captures everyone on payroll - producers, CSRs, account managers, administrative staff, and leadership.

Agencies that boost efficiency with AI often see this number climb without adding headcount. When routine tasks like call routing, quote intake, and certificate requests move to automation, existing staff handle more revenue-generating work.

Revenue per producer and revenue per CSR

Revenue per producer should land between $300,000 and $600,000, with top-performing agencies pushing above $500,000. This metric directly reflects producer effectiveness and the quality of support infrastructure around them. Revenue per CSR (the revenue volume each customer service representative supports) typically ranges from $300,000 to $400,000 for well-run agencies.

The ratio between these two numbers matters as much as the numbers themselves. Agencies with strong call management systems free producers from service work, pushing their revenue-per-producer numbers higher without burning out support staff.

Growth metrics that separate leaders from laggards

Three growth benchmarks deserve a permanent spot on your dashboard:

• Organic growth rate: 5-15% is good, 15%+ is excellent. This excludes acquisitions and measures your agency's ability to grow through new business, cross-selling, and account rounding
• Total growth rate: Includes acquisitions. Agencies pursuing a buy-and-build strategy often post 20-30% total growth, but organic growth must stay strong or you're simply buying revenue
• New business production as a percentage of revenue: Best Practices agencies typically generate 15-25% of total revenue from new business annually, offsetting natural attrition and fueling net growth

Agencies investing in SEO-driven lead generation and local search visibility often outperform on new business production because they attract inbound opportunities rather than relying solely on producer prospecting.

Operational Benchmarks: Productivity and Efficiency Metrics

Operational insurance agency metrics reveal whether your team structure matches your workload. These numbers expose bottlenecks before they become crises and highlight where technology investments pay off fastest.

Productivity benchmarks: Policies and premium per person

The policies-per-CSR benchmark varies significantly by line of business:

• Personal lines CSR: 400-600 policies per CSR is the target range, with top agencies managing 700+ through automation and self-service portals
• Commercial lines CSR: 150-250 policies per CSR reflects the greater complexity of commercial accounts
• Premium per CSR: $2.5 million to $4 million in managed premium for personal lines, $3 million to $6 million for commercial lines
• Accounts per account manager: 250-400 accounts in commercial lines, though this drops significantly for complex middle-market books

When CSRs spend 30-40% of their day answering routine phone calls - policy status inquiries, certificate requests, payment questions - these productivity numbers suffer. Agencies that reduce routine phone calls by routing common inquiries through AI-powered voice systems see measurable jumps in policies-per-CSR ratios within months.

Efficiency ratios: Where your money goes

The expense ratio breakdown tells you whether your spending aligns with top performers:

• Total compensation as a percentage of revenue: 55-65% is typical, with Best Practices agencies managing 50-58%. This is the single largest controllable expense in any agency
• Technology spend as a percentage of revenue: 3-6% is the current range, trending upward as agencies invest in management systems, AI tools, and digital platforms
• Occupancy costs: 3-6% of revenue, with agencies adopting work-from-home policies reducing this significantly
• Other operating expenses: 8-12% covering E&O insurance, professional fees, marketing, and training

Research from the Federal Insurance Office highlights that technology adoption remains uneven across the industry, meaning agencies that invest strategically in insurance technology gain disproportionate efficiency advantages. Your AMS software utilization rate matters as much as the platform you choose.

Staff cost management: The largest lever

With compensation consuming more than half of revenue, managing staff costs effectively separates profitable agencies from struggling ones. But slashing headcount isn't the answer. The smarter approach focuses on three strategies:

1. Automate repetitive tasks so existing staff handle higher-value work
2. Reduce employee turnover (replacement costs run 50-200% of annual salary)
3. Improve onboarding processes so new hires reach full productivity faster

Agencies facing the ongoing talent shortage find that reducing labor costs through targeted automation actually improves employee satisfaction - people prefer meaningful work over answering the same question 50 times a day.

Retention Benchmarks: The Metrics That Compound Over Time

Retention is the most powerful force in agency economics. A one-percentage-point improvement in client retention compounding over five years dramatically outperforms the same effort spent on new business acquisition. Yet many agencies track retention loosely - if they track it at all.

Client and revenue retention

Your agency should track three distinct retention metrics:

• Client retention rate: 90%+ is the target. Best Practices agencies maintain 92-95% client retention. Below 88%, you're running on a treadmill - new business barely replaces lost accounts
• Revenue retention rate: This accounts for rate changes within retained accounts and often exceeds 100% in hard market cycles. A 95% client retention rate might produce 98-102% revenue retention when carriers push rate increases
• Policy retention rate: Track this separately from client retention. A client might stay but drop one of three policies, eroding revenue without showing up in client retention numbers

Data from CustomerGauge's NPS research shows that satisfied customers may still churn when something better comes along - but truly loyal customers persist even through service hiccups. Net Promoter Score creates an additional touchpoint and reveals enthusiasm versus mere tolerance, making it a leading indicator of future retention.

Agencies providing multilingual customer support report higher retention rates in diverse markets, addressing a touchpoint that competitors often neglect entirely.

Employee and producer retention

Your people are your most expensive and most valuable asset. Two internal retention metrics deserve monthly attention:

• Employee retention rate: Target 85%+ annually. The insurance industry averages around 12-15% voluntary turnover, but best-run agencies keep it below 10%. Every departure costs you institutional knowledge, client relationships, and months of recruiting and training
• Producer retention rate: Target 90%+. Losing a validated producer means losing their book relationships and the years of investment it took to build them

The 2025 customer experience benchmark report underscores that employee experience directly drives customer experience - agencies with high internal turnover almost always show lower client retention numbers. Building remote accountability systems helps retain employees who value flexibility without sacrificing performance visibility.

Producer Benchmarks: Measuring Sales Engine Performance

Producers drive growth. Without clear benchmarks, you can't distinguish between a producer who needs more support and one who needs a different career. These four metrics give you that clarity.

New business production and validation timelines

New business per producer should reach $300,000-$500,000 annually for validated commercial lines producers. Personal lines producers typically validate at lower absolute numbers but higher policy counts. The validation timeline - when a new producer should become self-sustaining - varies by agency size and market:

• Year one: $100,000-$150,000 in new business commission revenue
• Year two: $200,000-$300,000 cumulative
• Year three: Fully validated at $300,000+ with a sustainable pipeline

Agencies that miss these timelines often discover the problem too late. Monthly pipeline reviews and 90-day activity benchmarks catch underperformance early enough to course-correct. Sonant AI's work with hundreds of agencies shows that producers who receive pre-qualified inbound leads from AI virtual receptionists validate 20-30% faster because they spend less time on cold prospecting and more time closing.

Book growth and cross-sell metrics

Two additional producer metrics round out the picture:

• Book growth rate: Validated producers should grow their existing book 8-12% annually through account rounding, coverage upgrades, and referral generation. Below 5% signals complacency or lack of account management discipline
• Cross-sell ratio: agencies maintain 2.5-3.5 policies per household (personal lines) and regularly bundle commercial property, general liability, auto, workers' compensation, and umbrella for business accounts. Every additional policy deepens the relationship and raises the switching cost for the client

Agencies that scale without proportional hiring lean heavily on cross-sell efficiency - it's dramatically cheaper to sell an additional policy to an existing client than to acquire a new one. Effective inbound call management ensures that every service interaction becomes a cross-sell opportunity rather than a pure cost center.

Insurance Agency Benchmarks by Agency Size

Size changes everything. A $900,000 agency faces fundamentally different challenges than a $30 million operation. Here's how key insurance agency benchmarks shift across the four main size categories from the Best Practices Study.

Under $1.25M revenue

These agencies operate with thin margins and minimal staff - often an owner-producer plus one to three support employees. Key benchmarks include:

• EBITDA margin: 12-18% (owner compensation often blurs the line between profit and salary)
• Revenue per employee: $100,000-$140,000
• Organic growth: 5-10% is strong at this size
• Client retention: 88-92%

At this stage, the most impactful improvement usually comes from hiring virtual assistants or deploying AI tools that handle administrative overflow without the fixed cost of a full-time employee.

$1.25M to $5M revenue

This is the "messy middle" where agencies outgrow owner-does-everything models but haven't yet built formal management layers. Benchmarks shift noticeably:

• EBITDA margin: 15-22%
• Revenue per employee: $130,000-$180,000
• Organic growth: 8-15% separates growth agencies from stagnant ones
• Technology spend: 3-5% of revenue, with leading agencies investing in claims automation and AMS integration

$5M to $25M revenue

Agencies in this range benefit from operational scale. Dedicated department managers, formal sales processes, and carrier relationship all improve benchmarks:

• EBITDA margin: 20-28%
• Revenue per employee: $160,000-$220,000
• Pre-tax profit margin: 18-26%
• Producer new business: $400,000-$600,000 per producer annually

According to Gallagher market data, mid-market agencies face increasing pressure from both consolidators above and nimble, tech-enabled shops below. Operational efficiency at this tier becomes a competitive moat. Agencies maintaining strong data and compliance practices also attract better carrier appointments and higher contingent payouts.

$25M+ revenue

Large independent agencies and regional brokers operate with institutional advantages - dedicated analytics teams, private-equity backing, and carrier negotiating power. Their benchmarks reflect that scale:

• EBITDA margin: 25-35%
• Revenue per employee: $200,000-$300,000+
• Organic growth: 8-12% (harder to maintain at scale, but still expected)
• Employee retention: 90%+ with formal career pathing programs

Using Benchmarks: From Measurement to Action

Numbers without action are just interesting trivia. Here's how to turn insurance agency benchmarks into a concrete improvement plan.

Self-assessment framework

Start by mapping your agency against the percentile framework below. For each metric, identify whether you fall in the bottom quartile, median range, or top quartile:

Use your free agency valuation calculator to translate these benchmarks into enterprise value estimates. The exercise makes abstract performance gaps tangible - when you see that improving EBITDA margin by three points adds $500,000 in agency value, prioritization becomes obvious.

Prioritizing improvements

Not all benchmarks deserve equal attention. Prioritize based on two factors: gap size (how far you fall below target) and impact potential (how much improvement affects the bottom line). Generally, this priority order delivers the fastest ROI:

1. Retention first. A two-point improvement in client retention often delivers more bottom-line impact than a 10% increase in new business production, with far less effort
2. Expense management second. Reducing compensation as a percentage of revenue by three points - through automation, not layoffs - flows directly to EBITDA
3. Producer productivity third. Getting existing producers from $350,000 to $450,000 in annual new business costs nothing incrementally but drives organic growth
4. Operational efficiency fourth. Increasing policies per CSR from 400 to 550 lets you absorb growth without adding headcount

At Sonant AI, we've seen agencies approach this sequentially, starting with AI-powered call handling that simultaneously improves response times (retention), reduces staffing pressure (expense management), and qualifies leads for producers (productivity). That multi-metric impact explains why operational technology investments often rank at the top of improvement roadmaps.

Setting realistic targets

Avoid the temptation to target "Best Practices" numbers across every metric simultaneously. Instead, apply these guidelines:

• Set 12-month targets at the next quartile up from your current position - not at the top
• Focus on no more than three to four metrics per year
• Review monthly but recalibrate quarterly - market conditions shift, and rigid annual targets become counterproductive
• Benchmark against your own historical performance alongside industry data. If you improved organic growth from 6% to 9% last year, 12% is a reasonable stretch goal - 18% probably isn't

The 2025 financial services benchmark report from Sprout Social analyzed over three billion messages and found that insurance brands reaching customers through multiple channels build stronger loyalty. Apply this principle to your benchmarking process: track agency financial benchmarks across financial, operational, and relationship dimensions simultaneously rather than fixating on one category.

Understanding insurance fronting arrangements and their impact on your commission structure also matters when interpreting revenue benchmarks - fronted programs may show different revenue-per-policy characteristics than traditional carrier placements.

Building Your 2026 Benchmark Action Plan

Insurance agency benchmarks only create value when you act on them. The agencies that consistently outperform don't just measure better - they build systematic improvement into their quarterly rhythms.

Start this week. Pull your last 12 months of financial data and score yourself against the metrics in this guide. Identify your three widest gaps. Then build a 90-day plan targeting the highest-impact improvement area first - whether that's retention, producer productivity, or operational efficiency.

The agencies that will dominate 2026 and beyond share one trait: they treat measurement as a competitive weapon, not a compliance exercise. Your numbers tell a story. Make sure it's the story you want to tell.