The document discusses how the average age of owners impacts agency growth. Agencies with the youngest weighted average owner age, 42.9 years, have the highest average commission and fees growth rate of 6.15%. In contrast, agencies with the oldest average owner age, 67.3 years, have a much lower growth rate of 2.66%. Diversifying ownership among younger employees benefits agencies by attracting and retaining high-quality employees who have a vested interest in driving the agency's success and continued growth. Successful perpetuation of an agency results from a well-planned transfer of ownership to high-performing individuals, rather than a single transaction.

1. FOR THE RECORD
A MarshBerry Publication
Volume II, Issue 9 September, 2008
Weighted Average Owner Age and Growth
Successful perpetuation is the result of a well-conceived and executed plan, not a single transaction.
Agencies with the foresight to transfer ownership to the high-performing individuals who are driving
agency value are more likely to perpetuate, and if they choose to sell instead, will realize a higher
market value than agencies with narrowly-held ownership.
There are many additional benefits to diversifying agency ownership among younger employees.
Our research shows that among agencies with similar-sized revenue, those with the youngest weighted
average ownership age have the highest average commission & fees growth. As depicted in the
chart below, agencies with the lowest average age of ownership (42.9 years of age), have the highest
average commission & fees growth – 6.15%. Compare this to agencies with the highest average age of
ownership (67.3 years of age) which have an average commission & fees growth rate of 2.66%.
Impact of Average Owner Age on C&F Growth
80.0 7.00%
6.15%
70.0 6.00%
C&F Growth Rate
60.0 4.54% 5.00%
Average Age
50.0
4.00%
3.15%
40.0
2.66%
3.00%
30.0
2.00%
20.0
10.0 1.00%
67.3 53.8 50.3 42.9
0.0 0.00%
0% - 25% 25% - 50% 50% - 75% 75% - 100%
Quartile Groups
Weighted Average Owner Age* Total Commissions & Fees Growth Rate
*Weighted Average Owner Age is the sum of each owners age multiplied by their ownership percentage Source: MarshBerry
Agencies that offer key employees ownership opportunities will be more likely to attract and retain
high-quality employees. These employees, having a vested interest in the success of the agency, will
continue to drive agency growth.
Authored by Craig Niess, MarshBerry Product Manager / Consultant, 440-392-6584
MarshBerry • 4420 Sherwin Road • Willoughby, Ohio 44094 • 800-426-2774 • www.MarshBerry.com • MarshBerry@MarshBerry.com
No portion of this publication may be reproduced without express written consent from Marsh, Berry & Company, Inc. All rights reserved © 2008.
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