Canadian P&C brokerages increased average operating profitability, despite recession

Canadian property and casualty insurance brokerages increased operating profitability by roughly 5% between 2007 and 2009, reports Berris Mangan Consulting Inc.
In its study, Property & Casualty Insurance Brokerage Industry Report, Berris Mangan Consulting surveyed 285 Canadian P&C brokerages. In 2009, the average operating profitability of the sample stood at 30.6%, an increase from 2007’s 25.3%, despite the recession.
Of the 285 brokerages, 159 (56%) under-performed the industry average and 126 (44%) had above-average results.
According to the report, the above-average performers shared the following characteristics:
• greater focus on commercial lines sales;
• contingent commissions are higher through a combination of meeting volume requirements and through better front end underwriting;
• focus on and consistent execution of written business plans; and
• better utilization of staff resources between so-called ‘front-line’ and ‘back-room’ activities.
The report went on to note that not all of the above-average performers were large brokerages. Thirty-two were small (total income less than $500,000); 41 were medium (total income between $500,000 and $1 million); and the remaining 53 were large (total income greater than $1 million).
To obtain the complete report visit www.berrismangan.com.