As employers, taxpayers, consumers and charitable contributors, Massachusetts’ independent insurance agents make a $1.9 billion cumulative contribution to the Bay State’s economy last year, according to a new study by the Massachusetts Association of Insurance Agents (MAIA), a trade group.
The study underscores the community and economic impact the state’s agencies play. It comes at a time when — due in large part to a newly deregulated auto insurance system — many agencies face increased competition from direct writers and others with a limited agency presence in the Bay State.
Data from the survey pegged the total number of full time equivalent employees of MAIA member agencies at 11,452, with the average independent agency employing just over seven people. Approximately 85 percent of the agencies had five or fewer employees.
In all, independent agencies accounted for a payroll of over $837 million in 2007, as well $113 million in spending for employee benefits, including health insurance, pension and profit sharing and training costs.
In addition, Massachusetts’ independent insurance agencies contributed over $80 million in state and local taxes in 2007. Rental fees were also a major spending item for agents last year: Approximately 78 percent of MAIA members rented property for at least one agency location, and total agency spending topped $56 million.
Massachusetts independent insurance agencies are also significant spenders when it comes to technology, office furnishings, supplies, equipment, advertising, legal and accounting services, repairs, maintenance, security and construction. In 2007, the MAIA’s study shows that agencies spent over $97 million in these areas of the economy.
Also, independent agencies contributed over $8 million to charities –an average of over $5,200 per agency. The average charitable contribution by MAIA’s 200 largest agencies was almost $18,000 per agency.
Another fact borne out by the survey: The majority of agencies are mature, well established businesses in the communities. Nine percent of the agencies are over 100 years old, 31 percent of agencies are between 51 to100 years old and 19 percent of the agencies are between 31 to 50 years old.
“New players to the insurance marketplace in Massachusetts and around the country often have only a website and minimal connections to the state… They are here today and gone tomorrow as marketplaces change and greener pastures are found elsewhere,” said Francis A. Mancini, MAIA’s president and CEO.”Independent insurance agencies are ‘survivors’ in an economy and marketplace that acknowledges and appreciates those who are a vital part of the communities where they operate.”
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