Goosehead Insurance(GSHD)2025-03-01 02:35Financial Performance - Total Written Premium grew 29% to 3.0 billion in 2023[31] - Total revenue growth was 20% and Total Written Premium growth was 29% in 2024, with a 10-year Total Written Premium CAGR of 42%[57] - Franchise sales generated a 33% increase in premiums during 2024, with a total of 1,103 franchises operating as of December 31, 2024, reflecting a 10% decrease compared to 2023[50] - The company earns 20% of New Business Royalty Fees and 50% of Renewal Royalty Fees from franchise sales, contributing to its core revenue[48] Client Retention and Satisfaction - Client retention rate reached 84% in 2024, which is among the best in the industry[23] - The company achieved a Net Promoter Score (NPS) of 89 in 2024, a decrease from 92 in 2023, while maintaining an 84% Client Retention rate[56] - Goosehead's service centers achieved a 2024 NPS score of 89, leading to an 84% Client Retention rate and a 98% premium retention rate[68] Sales and Production - Average commission rate on new business premium was 14% and on renewal business premium was 12% in 2024[29] - New Business Production per Agent in corporate sales was 115 thousand for those with more than one year[40] - Corporate sales agents with more than three years of tenure averaged 2.8x as much New Business Production per Agent compared to industry best practices[42] - The company’s corporate sales agents generate approximately 2.8 times as much new business as top-performing personal lines agents after three years[62] - Franchise sales agents with over three years of tenure averaged 1.9 times the New Business Production per Agent compared to the industry best practice[47] Technology and Innovation - Goosehead's proprietary technology allows clients to receive quotes in less than two minutes using just three data points[35] - Goosehead's Digital Agent combines millions of data points to deliver tailored insurance quotes to clients[22] - The company has a competitive advantage through its proprietary cloud-based technology platform, which enhances sales and service efficiency[64] - Goosehead aims to leverage technology to enhance operational efficiencies and maintain a competitive edge in the market[68] Franchise Model and Growth - Goosehead has 1,103 operating franchise locations, reflecting significant growth in the franchise model[28] - As of December 31, 2024, Goosehead has operating franchises in 44 states, covering over 98% of the total U.S. population[66] - Total operating franchises decreased by 10% to 1,103 in 2024 from 1,226 in 2023, showing an improvement in franchise turnover compared to the previous year[75] - Franchise owners benefit from reduced startup costs and do not require additional employees or retail locations to launch their agencies[52] Employee Engagement and Culture - More than half of Goosehead's employees are women, and over one-third identify as racially diverse, reflecting the company's commitment to diversity[96] - Goosehead offers a competitive health benefits package, including a 401(k) retirement savings plan with matching contributions that vest over four years[95] - The company has adopted a code of business conduct and ethics that applies to all employees, promoting honest and ethical conduct[100] - Goosehead maintains strong Equal Opportunity and Anti-Harassment policies, ensuring a respectful workplace[97] - The company emphasizes a meritocratic culture, aligning employee incentives with shareholder interests through an Omnibus Incentive Plan[94] - Goosehead provides ongoing professional development through a structured training curriculum for all incoming recruits[92] - The company engages employees and franchise partners through in-person town halls, facilitating real-time updates to its operating platform[93] - Goosehead's operating principles focus on integrity, exceptional service, and creating value, fostering a motivated workforce[99] - Goosehead conducts weekly virtual webinars for ongoing training and mentoring of corporate and franchise agents[92] Operational Efficiency - Service expenses as a percentage of gross commissions were 3.2 times lower than the industry best practice in 2024[64] - The company’s service centers support both new and renewal business, allowing agents to focus on acquiring new clients[64] - Goosehead's compensation for service team employees averaged over 51,000 in 2024, contributing to employee retention[68] Market Opportunity - The U.S. personal lines P&C industry is valued at approximately 453 billion, indicating a significant market opportunity for Goosehead[69] - The company plans to continue expanding its recruiting efforts on college campuses and through targeted internet campaigns to grow its agent count[66] Compliance and Reporting - The company encourages independent reporting of policy violations through a third-party solutions team[98]