The small Commercial insurance market is viewed as “one of the few bright spots” in the U.S. property & casualty insurance sector, according to a recent report from McKinsey & Co.

The small commercial market, which generally serves businesses with up to 100 employees and $100,000 in annual premiums, has good potential for growth in a “fragmented competitive and geographic landscape.” The report found that direct written premiums were between $99 billion and $103 billion for 2013, up from $91 billion in 2011. This represents just over one-third of the broader commercial lines market and includes about $6 billion in non-standard specialty lines premiums that are fairly evenly distributed across the U.S.

McKinsey found that almost 40% of sole proprietorships in the U.S. don't carry small commercial coverage. Some could be covered under home-based business owner policies or endorsements on their personal-lines policies, which demonstrates the possibility for growth in the smaller business market.

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Rosalie Donlon

Rosalie Donlon is the editor in chief of ALM's insurance and tax publications, including NU Property & Casualty magazine and NU PropertyCasualty360.com. You can contact her at [email protected].