In other words , NUPP measures what an agency ' s unvalidated producers were paid versus what they earned . It is a fundamental measure of an agency ' s investment in producer development , critical to its long-term growth capacity .
Generally speaking , a NUPP of 1.5 % - 2.0 % is considered healthy . In the 2024 Study , each revenue category exceeded this 1.5 % NUPP minimum threshold , indicating that Best Practices agencies are appropriately reinvesting in their future growth engines .
PROFITABILITY
Profitability is another of the most critical Best Practices Benchmarks . Without adequate levels of profitability , shareholder returns will suffer , and agencies will struggle to have the capital necessary to reinvest in the future .
events . In other words , pro forma profit reflects an agency ' s true and sustainable profitability after the numbers are cleaned up to remove any static .
When referring to pro forma profitability , the
When measuring profitability , the Best Practices Study focuses on pro forma profitability . Pro forma is Latin for “ as if ,” indicating that we are adjusting an agency ' s reported financials . To arrive at pro forma profitability , normalizing adjustments are made to an agency ' s reported financials to restate them after accounting for non-recurring and non-operating
6 KANSAS INSURANCE AGENT & BROKER