Big ‘I’ Study Shows Growth in Premium, Market Share

January 19, 2005

The overall property/casualty market grew 9.5 percent in 2003, and independent agents and brokers produced 59.4 percent of this market, according to “The 2003 Property Casualty Insurance Market” report recently released by the Independent Insurance Agents & Brokers of America. The independent agency system grew its overall market share by 0.7 points in 2003, achieving growth in share in both commercial and personal lines.

The P/C market weighed in at $434.68 billion in direct written premiums in 2003, of which independent agents and brokers wrote $258.17 billion. The overall market increased by $41.29 billion, and the independent agency system produced $27.27 billion of this growth.

“The results of this report clearly show there is a strong and growing consumer and business acceptance of the independent agency and brokerage consumer model, and it also identifies the very real opportunities independent agents and brokers have for growth,” said IIABA CEO Robert A. Rusbuldt. “The research also shows that that there are efficient companies using each type of distribution system, and that efficient independent agency writers are able to deliver insurance just as cost-effectively as captive-agent writers and many of the direct companies, and sometimes even more effectively.”

On the commercial lines side, the market share report finds that the market continued to grow at the double digit rate of 11.8 percent in 2003 to $229.14 billion. This growth of over $24 billion in commercial lines written premium followed a strong year of growth in 2002, when this market increased by 19 percent.

The personal lines market also experienced a healthy growth of 9 percent in 2003 to $205.54 billion, following an 11 percent growth in 2002. Independent agents and brokers added $6.82 billion in premium in 2003, building upon the $6.7 billion in personal lines premiums they added in 2002.

Independent agents and brokers increased their market share in personal lines by three-tenths of a percent to 36.62 percent at the expense of the captive agent companies.

In addition, independent agents and brokers increased their commercial lines market share in 2003 by over a half of a percent to 79.83 percent. Because independent agents and brokers write almost 80 percent of this business, they experienced an increase in premium of $20.45 billion in 2003 following a more than $25 billion increase in 2002.

The full report provides total as well as independent agency premium volumes for the given lines, as well as the respective market shares for distribution systems.

“We are very pleased by the positive trends this report has identified,” says Madelyn Flannagan, IIABA vice president of education and research. “Clearly there are real opportunities for independent agents and brokers, and this report points the way for them to take advantage of these opportunities.”

IIABA contracts annually with A.M. Best Company to assess the state of the independent agency system with year-end industry market share and company-expense data.

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