With deep roots in their communities, New York independent insurance agencies are healthy and growing, Independent Insurance Agents & Brokers of New York Inc. (IIABNY ) said.
IIABNY said a recent analysis of New York agents in the 2014 Agency Universe Study shows insurance agencies in New York achieved greater revenue even while facing a difficult economy.
The Agency Universe Study is sponsored by Future One, a collaboration of the Independent Insurance Agents & Brokers of America and independent agency companies. The New York analysis of the 2014 Agency Universe Study was prepared by Zeldis Research Associates.
Participants in the study included a mix of agencies from New York City, Long Island, the downstate and upstate counties. (Respondents to the 2014 Agency Universe Study included 22 from New York City, 35 from downstate, 114 from Long Island, and 108 from upstate.)
According to the analysis:
• New York agencies are growing. Two-thirds of New York agencies saw revenue growth between 2012 and 2013. This was despite the lingering effects of the 2007–09 recession and an economy that has lagged the rest of the country in recovery, particularly in the upstate counties, according to IIABNY. New York’s results were comparable to those for agents in the rest of the U.S., where 70 percent of agents saw revenue growth.
• New York agencies, particularly those in upstate New York, face the challenges of serving a region that has grown relatively slowly since the beginning of the 20th century. The upstate economy has followed the up-and-down growth patterns of the nation as a whole (more than those of New York City). Economic losses during downturns have often been deeper than those experienced nationwide and it has recovered more slowly. For the most part, this pattern is explained by the maturity of the upstate economy.
• New York agencies average 51 years old, compared to 36 years for the remainder of the country. Correspondingly, nearly one-third of New York agency principals (29 percent) are over 65 years old (versus 17 percent of principals in the rest of the country). The maturity of New York agencies presumably reflects the ways they have been able to entrench themselves in the community and establish long-term relationships. At the same time, it highlights the importance of perpetuation planning and recruitment of new talent.
• New York agencies are fixtures in their communities. More than half (55 percent) of New York agencies have been in business at least 45 years. One-fifth of them started business before World War II. In the rest of the country, only 30 percent are 45 years or older and only 13 percent pre-date the war.
• New York agencies like to work with New York-based insurers. Compared with their peers outside the state, the percentage of New York agencies representing large national companies, such as Progressive, Travelers and The Hartford, is substantially less. Large percentages of New York agencies represent local insurers such as Utica National, Merchants, Dryden Mutual and NYCM. Presumably, these carriers are in a better position to deal with the specific requirements of the state insurance department and have the advantage in dealing with their home market, according to IIABNY.
• Retaining talent is a key challenge for agencies nationwide, but New York agencies are twice as likely to cite it as particularly difficult. At least one-third of New York agencies said they find it extremely challenging to maintain experienced producers and staff. With limited capacity to grow in their current geographic markets (and some agencies simply “trading business”) producers and other talent may be tempted to maximize opportunity in more strongly emerging markets.
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