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IIAB: Independent Agents Generate 60% of Property/Casualty Premium Revenue

Posted on 10 Mar 2009

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According to an annual state of the independent agent system report from the Independent Insurance Agents & Brokers of America (IIAB), independent insurance agents and brokers are responsible for $6 of every $10 of overall property-casualty premium revenue.

Independent agents produced $288.5 billion of the total $489 billion market in 2007, the last year for which data was available. Agents generated $289.3 billion in 2006, $284.1 billion in 2005 and $276.11 billion in 2004.

The market share of independent agents remained steady at just under 60% of the overall property-casualty premium. With the market shrinking slightly, regional and national independent agency companies wrote $800 million less in premium in 2007, compared with a $5 billion in 2006 and a $4 billion gain in 2005.

“This annual study provides the most accurate picture of what is occurring with property casualty insurance distribution because it separates out the direct response companies from the captive agency companies,” said Madelyn Flannagan, the Big I’s vice president of research and education, in a statement.

Unlike other reports, Flannagan added, the Big I study separates the affiliates of groups which use different distribution systems and places these affiliates in the appropriate distribution category wherever the company group uses separate affiliates for this purpose.

The 13th annual study, based on year-end data supplied by A.M. Best Co., also indicates that the overall property-casualty market remained flat in 2007.

“While the weakening economy dominated headlines in 2008, the property-casualty insurance industry has actually been feeling the impact of relentlessly soft pricing for the past several years as reflected in the 2007 analysis,” says Bob Rusbuldt, Big I president and CEO. “The independent agency system continues to be the leader in commercial lines, holds a significant share of personal lines, and dominates both lines in some states.”

The overall property-casualty market wrote direct premiums of $489 billion in 2007, compared to $488.4 billion in 2006, according to the data. The property-casualty market grew by 2.5% in 2006, on the heels of less than 2% in 2005.

Preliminary year-end results coming in for 2008 indicate continuing weak pricing, according to the Big I. Only the homeowners insurance line increased by any measure, increasing 3% overall.