Independent personal lines insurance agency Goosehead has reported a net income of $5.4m for the fourth quarter of 2023, mainly due to revenue growth, a significant improvement compared to the $2.6m reported the prior year quarter.
According to Goosehead, its revenues saw a 10% increase in Q4 2023, to $63.0m, compared to the corresponding period in 2022.
Core Revenues, a non-GAAP measure which excludes contingent commissions, initial franchise fees, interest income, and other income, were $56.9m, a 10% increase from $51.8 million in the prior-year period.
This growth was driven by improved productivity, strong client retention of 86%, and rising premium rates, the company explained.
Goosehead’s total written premiums, which are considered to be the leading indicator of future revenue growth, also saw an increase in the quarter, by 29% over the prior-year period to $756.1m.
The firm said it anticipates total written premiums placed for the whole of 2024 to be between $3.70bn and $3.85bn representing 25% organic growth on the low end of the range, and 30% organic growth on the high end of the range.
Total revenues are expected to be between $310m and $320m representing 19% organic growth on the low end of the range and 22% organic growth on the high end of the range.
Mark E. Jones, Chairman and CEO, said: “We had a tremendous 2023 with premium growth of 34%, total revenue growth of 25%, Core revenue growth of 24%, and EBITDA growth of 90% with margin expansion of 900 basis points to 27%.
“Our overall results this year unfolded according to plan as we have successfully implemented strategic changes to improve productivity and increase earnings power. The results of our Corporate sales leadership reorganization in late 2022, followed by consolidating Franchise leadership with Corporate in Q4 2023 drove very large productivity gains.”
Jones concluded: “The next phase of our execution will be driving accelerating new business production growth in 2024, particularly in our Franchise network and adding meaningfully to our overall productive capacity which should spring load into accelerating revenue and earnings growth in 2025 and beyond.
“We will be driving this improved growth on a significantly higher and expanding profitability base, further enhancing our competitive moat and positioning us well to execute on our long term objective of personal lines industry leadership.”
