By David A. Baetz
From AA&B June 1975
If you've been yearning for the "good old days" of 10 years ago during these months of economic trauma, perhaps the results of the recently completed annual survey of American AGENT & BROKER readers will make you glad the clock can't be turned
back.
For example, survey results for 1965 indicated that 2,800 readers (16%) had premium volumes in excess of $250,000. This year more than 26,000 readers (67.3%) fall into that category .Some of that increase can be accounted for by a doubled circulation and some can be attributed to the effects of inflation, but the biggest portion of the more than nine-fold increase in agencies producing in excess of $250,000 of premiums must be
attributed to real growth.
The American AGENT & BROKER Readership Survey is sent to a scientifically selected random sample of readers each year to find out what kinds of agents are reading the magazine and in what areas of insurance they are most active and interested. This year 54% of the readers who received questionnaires filled out and returned them.
Among AA&B readers the trend to larger agencies during the past 10 years is unmistakable. In addition to the figures already cited, agencies producing premiums in excess of one million dollars have increased significantly in the last decade. In 1965, only 1.5% of AA&B readers had volumes exceeding one million dollars. By 1970, agencies in that category had increased to 8.3% of the circulation, and this year 19.6% of the agencies receiving the magazine have volumes of more than one million dollars.
Some of the increase in size of agencies can be explained by the number of purchases and mergers that take place each year. Ten years ago, 25% of AA&B readers had participated in a purchase or merger sometime during the five previous years. For the past five years, the number of readers that fall into that category has exceeded 32% each year.
Another factor in the growth in agency volumes over the past 10 years has been a basic change in the nature of the agencies served by American AGENT & BROKER. Ten years ago, only 15% of AA&B readers said that commercial lines accounted for more than half of their premium volumes. This year, 25% of survey respondents said commercial sales generated more than half their volume. In most cases these agencies are selling more personal lines than ever before, but the volume produced by these sales is a lower percentage of the total premium volume.
If there were a "typical" reader of American AGENT & BROKER, that reader would be a principal or producer in an independent agency or broker-age operation (98%). The reader would be a veteran of more than six years in the business (95%), and would be working in a marketing area of less than 500,000 population (76%). The premium volume of typical reader's agency would be above $250,000, and it would have increased last year (80.7%). In addition, this reader not only received bonus income from profitable business last year (77.4%), chances are he received a contingency check from more than one company (80%).
Although AA&B readers depend primarily on property-casualty insurance for their livelihoods, an increasing number of them are turning to life and health insurance as good sources of additional income. In 1965, 67% of readers reported writing life insurance, and only 27% of those who did sell it produced more than $100,000 of sales. This year, 87% of readers sampled said they were active in writing life insurance, and 44% of them sold more than $100,000 in 1974. (If you are interested in taking better advantage of your potential for life sales, the July American AGENT & BROKER will feature material on how several property-casualty agents are adding to agency income significantly through the sale of life insurance.)
Another indicator of the trend among AA&B readers toward larger agencies is evident in survey response to the question, "How many fire and casualty companies do you represent?" In 1965, only 33% of the respondents represented six or more companies. By 1970 that figure had increased to 43%, and this year's re-suits indicate that 52% of readers now represent six or more companies. The most significant growth in this area was among agencies that represent 10 or more property-casualty markets. A decade ago 8.4% of readers were in that category, and this year 17.5% represented at least 10 companies.
While it isn't surprising that the readers of an educational magazine would have a higher-than-average interest in continuing education, it's interesting to note a steady growth in the number of readers who have received or are working toward the CPCU designation. This year, 15% of the survey respondents were in that category. A further indication of reader interest in upgrading performance is that 34% of respondents report that they have formal insurance education programs in their agencies for
themselves and their staffs.
A final area in which American AGENT & BROKER readers are beyond compare in the insurance business is willingness to share information about themselves and their agencies with fellow independent agents and brokers throughout the U.S. The annual AA&B Readership Survey consistently has received more than a 50% response from sampled readers. A response of at least 50% is necessary for the editors to use the results to make accurate judgments about the nature of the audience and its changing interests, and to select information for publication that will best serve that audience.
