The Independent Insurance Agents & Brokers of America (IIABA or the Big "I") has released the results of the 2013 Market Share Study (based on 2011 data) which reveal that after years of market contraction, all property-casualty insurance premium lines grew. The study also showed that independent agents and brokers (collectively "IAs") were well positioned to capture a substantial piece of the market going forward.
This is the 17th year the Big "I" has contracted with A.M. Best Company to supply it with year-end industry market share and company expense data. The Big "I" analyzes this data annually to assess the state of the independent agency system.
"The Big ‘I' is pleased to announce that, despite the market fluctuations and challenges of recent years, the independent insurance agency system remains stable, strong and growing," says Bob Rusbuldt, Big "I" president and CEO. "Many carriers that weathered the storm of market contractions for several years were able to successfully bounce back."
The market share study revealed that many regional and national IA carriers expanded their market shares by impressive double digits and that overall IA shares grew in several states. More good news also showed that regional IAs outpaced market growth in many business lines across the country.
"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," notes Madelyn Flannagan, Big ‘I" vice president of agent development, education and research. "Unique to the Big ‘I' study, A.M. Best separates out 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."
Other findings from the Market Share Study include:
• IAs outperformed captive agencies carriers in personal lines and grew premiums by nearly the same amount as direct response carriers largely due to impressive performance in homeowners, where IAs outperformed the captive agencies;
• IA carriers also benefited greatly by a huge surge in commercial premiums, which climbed by 5% in 2011. IA carriers also captured $8.4 billion in additional premiums in 2011, which represents 74% of the entire $11.4 billion growth in that market.
• IAs still control a majority of the entire p-c market, writing 57% of all premiums, including a third of all personal premiums.
• IAs still dominate commercial insurance sales, which resurged in 2011, growing $11 billion or 5% more than 2010.
• IAs grew premiums and/or market share in several states and IA share remains strong in many states overall. In many states, IAs dominate both personal and commercial lines.
• IAs are as efficient as other models. While IAs as a group may have higher efficiency ratios compared with captive and direct writers, there are several IA carriers with personal auto efficiency ratios that rival these challengers. As noted in past reports, this proves that management, not the model itself, is the key driver.
• Many Big "I" Best Practices firms continued to grow in the face of recent weak markets and are doing well now that the p-c market appears to have turned around.
Agencies that are easy to do business with, use improved access to technology and leverage the confidence and customization communicated through the Trusted Choice® brand have the potential to enjoy robust growth in every state and every product line. All of the data in the Big "I" report come from A.M. Best and is printed with its permission. More information on the study is available by request or online at: www.independentagent.com/Resources/Research/MarketShareReport.
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 approximately a quarter of a million 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.