Alexandria, Va. — The number of independent agencies has stabilized, according to the 2008 Agency Universe Study. Future One, a collaboration of the Independent Insurance Agents & Brokers of America (IIABA) and leading independent agency companies, has released key findings from the recently completed study.
The study surveys a wealth of issues about independent agencies operating in the United States, 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, IIABA 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, IIABA VP 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 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. Agencies are able to do more work with fewer employees, and 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. Agents now assert that carriers “make it easy for CSRs to write business.”
• Concern about controlling expenses: While maintaining experienced staff, finding carriers who will preserve their commitment to an agent’s market as well as provide the coverage the agency’s customers need still remain major concerns.
Source: Independent Insurance Agents & Brokers of America
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