God knows our economy and the property-casualty industry are engulfed by what seems like an endless bank of dark clouds. But the Big I's new “Agency Universe Study” suggests that there may be a silver lining in there somewhere (or as the optimistic kid said on finding a pile of horse manure under the Christmas tree, “There must be a pony somewhere!”).
First off, the number of independent agencies has stabilized since the 2006 study. Although down from an estimated 44,000 agencies in 1996, this year's 37,500 is roughly the same as 2006, suggesting that many of the dire predictions about the demise of the small to midsized independent agent may be premature — and that the M&A boom of recent years is bottoming out.
But the real surprise is not the slowdown in M&A activity, but the increase of small (revenues of $150,00 and under), start-up agencies — 11 percent of survey respondents were founded in 2004 or later (including 4 percent that launched in 2007 and 2008).
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