Goosehead Insurance(US:GSHD)2023-02-25 00:25Financial Performance - Total Written Premium grew 42% to $2.2 billion from $1.6 billion in 2021, indicating strong organic growth [30]. - The company achieved a revenue growth of 38% and Total Written Premium growth of 42% in 2022, with a 10-year Total Written Premium CAGR of 43% [55]. - Premiums in franchise sales grew by 46% during 2022, with a total of 2,125 franchises as of December 31, 2022, including 1,413 operating franchises [50]. - New Business Royalty Fees are set at 20% of commissions during the first term of the policy and 50% for renewals, creating strong revenue and margin expansion opportunities [48]. Client Retention and Satisfaction - Client retention rate reached 88% in 2022, which is nearly 2.6 times the 2021 P&C industry average [23]. - The company maintained a Net Promoter Score (NPS) of 90 in 2022, which is 2.6 times the industry average, and an 88% Client Retention rate [54]. - The company achieved a 2022 Net Promoter Score (NPS) of 90, leading to an 88% Client Retention rate and a 100% premium retention rate [68]. Sales Performance - Average commission rate on new business premium was 15% and on renewal business premium was 13% in 2022 [29]. - Corporate sales agents with more than three years of tenure averaged 4.1 times the New Business Production per Agent compared to industry best practices [41]. - Franchise sales agents with more than three years of tenure averaged 2.5 times the New Business Production per Agent compared to industry best practices [27]. - New Business Production per Agent in corporate sales was $110,000 for agents with more than one year of tenure in 2022 [39]. Growth and Expansion - The company has expanded to 1,413 operating franchise locations, reflecting rapid growth in its franchise model [28]. - The company expects to continue its expansion in 2023 within existing markets [42]. - Franchise locations increased by 18% to 1,413 in 2022 from 1,198 in 2021, while total franchises decreased by 1% to 2,125 in 2022 from 2,151 in 2021 [76]. - As of December 31, 2022, the company has signed Franchise Agreements in 47 states, covering over 99% of the total US population, with a potential franchise candidate pipeline of approximately 171,000 [65]. Operational Efficiency - Goosehead's Digital Agent allows clients to receive accurate home and auto quotes in less than two minutes [34]. - Service expenses as a percentage of gross commissions were 2.9 times lower than the industry best practice, allowing for best-in-class NPS scores and retention [63]. - The company’s service centers drive both new and renewal business, enabling agents to focus on cultivating new relationships and winning new business [63]. - The company made over 2,400 platform improvements in 2022 to enhance service and business processes for its agent network [93]. Technology and Innovation - The company invests in technology to drive efficiencies and maintain a competitive edge in the market [69]. - Goosehead offers a competitive health benefits package, including medical, dental, and vision insurance, along with a 401(k) retirement savings plan with matching contributions that vest over four years [96]. Diversity and Inclusion - More than half of Goosehead's employees are women, and over one-third identify as racially diverse, reflecting the company's commitment to diversity, equity, and inclusion [97]. - Goosehead has established a Women's Professional Development Program (WPDP) to support female employees' personal and professional growth since 2015 [99]. - The company maintains strong Equal Opportunity and Anti-Harassment policies, ensuring a respectful and inclusive workplace [98]. Corporate Governance - Goosehead's code of business conduct and ethics applies to all employees and is designed to promote honest and ethical conduct [101]. - The company emphasizes a meritocratic culture, where performance is rewarded, and employees are encouraged to create value [100]. - Goosehead's operating principles focus on integrity, exceptional service, and teamwork, which are central to its business model [100]. - The company files its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q with the SEC, ensuring transparency and compliance with federal securities laws [103].