What Does the Future Hold for Independent Agencies?

Wouldn’t it be nice to know what the future holds? The insurance market, the economy, and consumer expectations are all shifting, making it hard to know where to focus.

The Council of Insurance Agents & Brokers (CIAB) reports that fourth-quarter 2024 marked the 29th consecutive quarter of premium increases across all account sizes. As an insurance agent, you already know that rates have been rising for a long time now, and you also know that selling insurance is a lot more complicated.

After 29 quarters of increases, you may be wondering:

• Will rate hikes continue?
• Will independent insurance agents be able to capture market share?
• Which strategies will lead to success going forward?

Even though it’s not possible to predict the future with certainty, current market conditions do shed some light on these questions–and there’s a lot of good news.

Will Rate Hikes Continue?

Many believe rate hikes will likely continue, at least in some lines and regions. The ongoing impact of extreme natural disaster losses means property and auto lines are especially likely to experience additional rate hikes.

While this is unwelcome news (especially for policyholders), there’s a silver lining: When it’s easy to find coverage, many people take a do-it-yourself approach to insurance–bypassing independent insurance agents to buy direct. When the market hardens, more insurance shoppers need help, which creates opportunity for agents.

Will Independent Insurance Agents Be Able to Capture Market Share?

It is highly probable that independent agents will be able to capture market share. Rising rates mean more insurance shoppers need help finding coverage. Independent insurance agents are in the perfect position to provide this assistance because they have access to numerous insurance solutions from multiple carriers.

The Big “I” 2024 Market Share Report found that the independent agency channel captured 62.2% of the property and casualty market share, including 87% of commercial lines written premium and 39% of personal lines written premium. Notably, the personal lines market share was up from 38% the year before. This data confirms that independent agents are gradually succeeding in growing their market share despite the proliferation of DIY digital options.

There is a caveat: competition among independent insurance agents is fierce. To succeed, agents need to stand out, which brings us to the next question.

Which Strategies Will Lead to Success Going Forward?

To stand out among the competition, independent insurance agents need to provide products and services other agents are not offering. Exceptional customer service is one option. However, on its own, it may not be enough. To gain market share, it’s important to offer insurance solutions that clients may not be able to find elsewhere.

In many cases, this means accessing the excess and surplus market to provide cost-effective solutions for challenging risks. S&P Global reports that the excess and surplus lines market grew by 32.3% in 2021, by 20.1% in 2022, and by 14.5% in 2023. Although growth has slowed since 2021, E&S lines are an increasingly important part of the insurance market.

Looking for More Predictions?

Would you like to explore this topic further? Find even more answers in our free report, “What Does the Future Hold for Independent Agents? 8 Eye-Opening Predictions.“

Topics Trends Agencies