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Property/Casualty Insurers Dealing with Severe Contraction in Small Business Sector

Source: Conning Research

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Posted on 11 Jan 2011

The property/casualty small business sector -- those accounts with less than 50 employees -- has shrunk substantially since 2007, and there was a dramatic shift in market share among small, mid-sized, and large insurers, according to a new study by Conning Research & Consulting.

“The small business sector for property casualty suffered disproportionately during and after the recession, partly due to lack of available capital and partly to its substantial exposure to the contracting industry. The delay in recovery has persisted through 2010,” said Clint Harris, analyst at Conning Research & Consulting. “Our analysis identifies two major shifts in the insurance market for small business since 2007. First, there has been a much deeper premium decrease for small business accounts, which we now estimate at $71 billion, or a 17 percent decline from 2007 levels—versus an 8 percent decline for middle and large market. Second, we see an important shift in market share in this sector from smaller insurers with less than $500 million in premium to midsized and large insurers.”

The Conning Research study, “The Property-Casualty Small Business Market: Larger Insurers Take Share in a Contracting Sector” analyzes the property-casualty small business sector—the conditions, market share shifts, success factors and strategies for the future.

“Despite the shift of market share from small to larger insurers, not all small insurers are losing share, and not all larger insurers are gaining,” said Stephan Christiansen, director of research at Conning. “The insurers that have been increasing their market share have been active in the market, acquiring business, increasing products and services, and expanding their distribution footprints. Even if the small business sector experiences rapid growth for the next few years, we believe that the shift in market share will continue. The market today favors broad, technically supported, and well managed distribution strategies, along with robust product development that addresses the evolving needs of small businesses.”

“The Property-Casualty Small Business Market: Larger Insurers Take Share in a Contracting Sector” is available for purchase from Conning Research by calling (888) 707-1177 or by visiting the company’s web site at


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