Anticipated Biennial Study Reveals Industry Growth and Stability
(ALEXANDRIA, VA – Dec. 4, 2008) – The number of independent agencies has stabilized—that’s one of the key findings of the 2008 Agency Universe Study. Future One, a collaboration of the Independent Insurance Agents & Brokers of America (the Big “I”) and leading independent agency companies, has released key findings from the recently completed study, hailed as the most comprehensive look at the independent agency system.
The study surveys a wealth of issues about independent agencies operating in the U.S. including their numbers, revenue base and sources, number of employees, ownership, mix of business, diversification of products, technology uses, non-insurance income sources, and marketing methods.
“The 2008 Agency Universe Study found that despite tough economic times in many areas of the financial services sector, independent agencies remain strong, stable, flexible and have much potential for growth,” says Robert Rusbuldt, Big “I” president & CEO.
“As predicted, the study found that the number of independent agencies has stabilized, halting a decade-long trend of larger and fewer firms,” says Madelyn Flannagan, Big “I” vice president for education and research. “More agencies are being formed than in past years, particularly in areas of the country suffering from difficulties in the availability of coverage, and their principals tend to be younger. This is a positive finding as the bulk of agents are baby boomers nearing retirement.”
Other key findings of the 2008 Agency Universe Study include:
- A long-term trend interrupted: The long-term trend toward fewer, larger agencies has been interrupted. Compared to 2006, the number of agencies has remained the same. This stabilization reflects a decrease in acquisitions and an increase in the number of start-up agencies.
- Growth in the number of small agencies: The percentage of small agencies (less than $150,000 in insurance revenue) grew between 2006 and 2008, while the percentage of all other size agencies decreased slightly.
- Doing more with less: Agency operations are becoming measurably more efficient. Apparently, agencies are able to do more work with fewer employees. Increased usage of technology likely contributes to more efficient processes.
- Satisfaction with carriers continues to improve: Satisfaction with personal lines and small commercial lines carriers is up since 2006. The area considered to be the most improved across carriers is that “they make it easy for CSR’s to write business.”
- Concern about controlling expenses: While �maintaining experienced staff’,’ finding carriers who will maintain their commitment to agent’s market and to providing the coverage agency’s customers need �still remain major concerns for agency future, �controlling expenses and reinvesting in agency’ has risen as a concern since 2006, as one might expect in tough economic times.
The 2008 Agency Universe Study is the ninth in a series that was first conducted in 1983. Subsequent studies were released in 1987, 1992, 1996, and 2000. Since 2000, the study has been completed biannually.
Since 2004, the Agency Universe Study has relied on Internet data collection. A small sampling of agencies participated via fax, as well. Approximately 1900 agencies were included in the 2008 analysis.
Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance�property, casualty, life, health, employee benefit plans and retirement products. Web address: www.independentagent.com.