After seeing record highs, 2024 began with the slowest growth rate for independent insurance agents and brokers since 2021.

According to Reagan Consulting’s quarterly Growth and Profitability Survey (GPS), the independent insurance agent and broker channel reported an organic growth rate of 8.4% for the first quarter of 2024 – the lowest growth rate in 11 consecutive quarters.

Although high growth is expected to continue after a strong 2023, recent results indicate a turnaround.

“Although growth and profitability remain strong by historical standards, we may be seeing the first signs that our industry, which has been red-hot since 2021, is starting to slow,” Regan partner Tom Doran said.

Recent downward pressures on property and casualty rates have contributed to slower growth. Commercial P&C, which generates most revenue for many agencies, saw its organic growth rate decline to 8.5% in the first quarter, down from 11.7% in the fourth quarter of last year.

Notably, for the first time in GPS history, growth in personal property and casualty exceeded both commercial property and casualty and employee benefits. Typically, brokerages struggle to achieve 3% organic growth in personal lines. However, personal property and casualty grew 9.9% in the first quarter of 2024, a slight decline from the fourth quarter’s 10.3%.

Duran commented: “Although personal lines is one of the smallest revenue categories for most brokerage firms – typically 10-12% for GPS firms – these impressive growth numbers were welcome news in light of slowing growth. Business profits and losses.”

Meanwhile, employee benefits saw a strong performance, posting a 7.5% growth rate in the quarter, the second-strongest first-quarter result in more than 10 years, driven by strong new business and higher health insurance premiums.

Likewise, as growth slowed, profitability also recorded a decline. Profitability, which typically peaks in the first quarter due to the timing of contingent income receipts, was 28.7%, down more than 2 points from the first quarter of 2023. The decline was largely due to lower margins in potential income/exceeding.

“Carriers must take into account increasing losses due to storm activity, nuclear jury verdicts, skyrocketing replacement costs, and catastrophic supply chain failures in 2022-2023,” Doran noted. ‘Brokerage line profitability, this downward trend is worth monitoring.’

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