Independent Producers Hold Market Position

By Mark E. Ruquet

NU Online News Service, Feb. 4, 10:47 a.m. EST?Independent producers are the overwhelming consumers' choice forpurchasing commercial insurance, while the market share in personallines is still dominated by direct writers, a study by an agentgroup revealed.

Research by the Independent Insurance Agents of America showsthe market shares in both commercial and personal lines for 2000did not significantly change over 1999.

The report uses data supplied by Oldwick, N.J.- based A.M. BestCompany to determine independent producers' market share.

According to IIAA, headquartered in Alexandria, Va., independentagents saw their commercial lines market share drop slightly from73.55 to 73.25 percent of the market. Captive agents' share of themarket declined from 26 to 25 percent. Direct writers' shareincreased to almost 1.5 percent.

In the seven states of Massachusetts, Rhode Island, Connecticut,Maryland, Pennsylvania, Illinois, Hawaii and the District ofColumbia, independent agencies write 80 percent or more ofcommercial lines. Massachusetts lead the group at 85 percent.However, in 11 states, Arizona, California, Vermont, Arkansas,Oregon, Montana, Michigan, Utah, Delaware, Colorado, Idaho,agencies write between 55 to 70 percent of the market, IIAA said,leaving plenty of opportunity available.

IIAA said the direct writers' increase was attributable to theinclusion of GE Capital Insurance Group as a direct writer.

The figures are a relief for independent producers when comparedto last year's report, which showed agents losing ground. Lastyear's report examined market shares from 1997 to 1999. It showedagents' had lost three percentage points in market share, which wasgained by captives.

Personal lines saw only slight changes from 1999 to 2000.

Independent agencies' market share of personal lines rose from33.4 in 1999 to 33.7 percent in 2000. The percentage for captiveagents dropped from 58.8 percent in 1999 to 57.8 percent in 2000,while direct writers increased their share from 7.9 percent in 1999to 8.5 percent of the market in 2000.

The more significant change in personal lines was seen inhomeowners insurance. Independent agencies held 36.8 percent of themarket in 2000 compared to 35.7 percent in 1999. Captives saw theirmarket share drop from 60 percent in 1999 to 58 percent in 2000.Direct writers remained steady at a little more than 4 percent ofmarket share.

However, the results varied by state. In Massachusetts, forexample, independent agencies managed to dominate most of thepersonal lines market in 2000, with a 78 percent share.

IIAA said it would post the report on www.independentagent.com.