Specialization and geography shape both where an agency competes and how a buyer values its niche expertise. The five-year series shows a clear hierarchy of verticals and a distinct geographic skew by agency size. This is the specialization-and-regional slice of the Best Practices trend data; the companion BPS trend reference indexes all seven themes.
§ 01 · Industry specializationConstruction leads.
Construction is the dominant specialization at every tier — and it deepens with scale, from roughly half of the smallest agencies to nearly two-thirds of the largest in 2022. Healthcare, real estate, and manufacturing follow, all concentrating in the larger tiers where the staff and carrier relationships to serve them exist.
| Agencies specializing (2022) | Under $1.25M | $5M–$10M | Over $25M |
|---|---|---|---|
| Construction | 51.6% | 54.5% | 64.4% |
| Healthcare | 19.4% | 36.4% | 46.7% |
| Real estate | 25.8% | 32.7% | 44.4% |
| Manufacturing | 12.9% | 36.4% | 46.7% |
| Technology | 19.4% | 38.2% | 42.2% |
Two verticals — technology and management / directors-and-officers — appeared in the data for the first time in 2022, signaling fast-developing, less-commoditized niches as agencies chase higher-margin specialty lines.
§ 02 · Regional distributionWhere agencies cluster.
Geography skews by size. The Southeast holds the largest share of the smallest agencies — 45% of the under-$1.25M tier in 2022 — reflecting Sun Belt growth at the small-business level. The largest agencies are more geographically balanced, with the Midwest carrying an outsized share of the over-$25M tier.
| Agencies by region (2022) | Under $1.25M | $5M–$10M | Over $25M |
|---|---|---|---|
| Southeast | 45% | 33% | 18% |
| Midwest | 19% | 16% | 36% |
| Northeast | 13% | 18% | 22% |
| West | 16% | 15% | 16% |
| Southwest | 7% | 18% | 9% |
§ 03 · The niche readSpecialization as a quality signal.
Specialization is double-edged. A documented, deep vertical commands a premium for the relationships and expertise it represents — but a single-vertical agency, especially one relying solely on a cyclical line like construction, carries concentration risk. Agencies with multiple documented specializations read as the most durable, combining premium pricing with diversified cyclical exposure.
- Construction dominates. The most common specialization at every tier — up to 64% of the largest agencies in 2022.
- Specialization deepens with scale. Healthcare, real estate, and manufacturing all concentrate in the larger tiers.
- New verticals emerging. Technology and management / D&O appeared in the data for the first time in 2022.
- Southeast anchors small agencies. 45% of the smallest tier in 2022 — Sun Belt SMB concentration.
- Largest agencies are geographically balanced. National-platform footprints rather than regional plays.
The benchmark is the baseline, not the price.
Best Practices benchmarks don't value an agency — they're the operating baseline a valuation is built on. Niche depth is a quality signal a buyer reads carefully: a documented specialization commands a premium, especially in emerging, less-commoditized verticals like technology and D&O, while a single-vertical book in a cyclical line carries concentration risk that tempers the multiple. Geography frames the sourcing thesis — the Southeast's small-agency density is roll-up territory; the balanced large-tier footprint is national-platform territory.
The way niche and geography flow into a valuation is the financial & transactional mechanics reference.
What BPS measures. The Best Practices Study tracks the operating and financial results of top-performing agencies, segmented by revenue tier. This brief reflects the 2018–2022 specialization-and-regional series.
Specialization. The share of agencies in a tier reporting a focus in each industry vertical; agencies may claim more than one.
Regional distribution. The share of agencies in a tier located in each region; smaller tiers show some data sparsity in the earliest years.
Frequency. The study publishes annually. Milly Books refreshes this brief with each new edition.