Independent insurance agents and brokers posted a 6% organic growth rate in the third quarter of the year, up from 5.8% in the second quarter, according to the Reagan Consulting Organic Growth and Profitability (OGP) survey released this week.

But the numbers mark another year-over-year decline since the third quarter of 2013, when independent agents recorded a 6.8% organic growth rate.

“We are clearly down from the pace that we were at a year ago, so that is meaningful,” says Kevin Stipe, president of Reagan Consulting. “There is a little deceleration of broker growth, primarily driven by flattening commercial property and casualty rates.”

Compared to this time last year, commercial p-c pricing is essentially flat, Stipe says. “If pricing is not going up, the only way brokers are growing is by growth in the economy or growing their market share,” he explains.

But agents and brokers remain undaunted, projecting an organic growth rate of 7% for 2014 as a whole. That would be the highest level in the OGP survey’s seven-year history. “At ground level, they’re feeling the economy has picked up during the year and unemployment is down,” says Stipe, citing positive factors such as agents writing new business and construction in major cities.

But Stipe projects they’ll finish the year at about 6%—a more realistic prediction for smaller agencies in particular, considering the survey’s finding that personal lines and the small segment of group insurance are the two slowest-growing business segments in the industry right now.

“Those two segments represent a bigger portion of the smaller firms’ revenues, translating into slower growth for smaller firms,” Stipe explains. “It doesn’t mean that a small firm is having a harder time growing than a large firm—it’s just that smaller firms have a different make-up of their revenue, and are overrepresented by two segments of the industry that are not growing much right now.”

Confidential submissions from approximately 150 mid-size and large agencies and brokerage firms also revealed that profit margins, measured by EBITDA (earnings before interest, taxes, depreciation and amortization), increased to 22.4% in Q3, up 0.3% from Q2. These margins typically decline in Q4, but any growth is a good sign.

While plenty will depend on how the remainder of the year finishes out, Stipe says it’s important to watch whether the carriers get more aggressive and slash prices heading into 2015.

“If the market softens significantly over the next few quarters, I think we will see agency growth slow, even if the economy continues to grow or at or above the current pace,” Stipe says. “Pricing will have more of an impact than the overall economy, but they will both be key contributors to what happens with agents and brokers.”

Morgan Smith is IA assistant editor.