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Independent insurance agencies hold margins as growth slows in 2025
Independent Insurance Agents & Brokers of America data shows organic growth decelerating in six of seven revenue bands in 2025, while pro forma EBITDA margins stayed in a 23.2% to 30.7% range.
Independent agency owners benchmarking performance in a softer commercial market are seeing a split result, according to the 2026 Best Practices Study update from the Independent Insurance Agents & Brokers of America, also known as Big "I", and Reagan Consulting. The study finds that profitability held steady even as investment needed to sustain future growth ran below what it considers healthy.
Organic growth decelerated in six of the study's seven revenue bands in 2025, ranging from 6.2% to 10.2%, down from 8.7% to 11.3% in the prior year. Reagan Consulting attributed the slowdown primarily to cooling commercial property and casualty rate conditions, with organic growth tied to new business, account retention, P&C rate movement, and GDP growth.
Despite the slower top line, pro forma EBITDA margins barely moved across revenue categories, ranging from 23.2% to 30.7%. The study also links agency health to the Rule of 20 metric, which combines organic growth and half of pro forma EBITDA margin, with the median range shifting from 19.0 to 29.5 to 19.3 to 26.1.
The report notes the softening aligns with other benchmarks, including the Council of Insurance Agents and Brokers, which said average commercial premiums fell 1.2% in Q1 2026 and commercial property premiums dropped 5.5% in the same period. Webb Milward, a partner at Reagan Consulting, said top agencies are responding by investing in producer recruitment and development rather than waiting out the cycle.