Trend Continues: Fewer But Larger Agencies
By Mark E. Ruquet
NU Online News Service, Sept. 23, 1:30 p.m. EST, NEW ORLEANS?The number of independent agencies continues to decline, but those remaining are growing in revenue size.
This was among some of the findings released in a preliminary report in the 2002 Future One Agency Universe Study and discussed during the Independent Insurance Agents and Brokers of America InfoXchange held here this weekend through Sept. 24.
Among some of the findings in the report, the number of agencies has dropped from 42,000 in 2000 to 40,000 in 2002.
While there are fewer agencies, new agencies continue to start up?3 percent of agencies that exist today began between 2000 and 2002, the report noted.
However, agency size is growing. In 2000, agencies with revenues of more than $2.5 million stood at 8 percent. In 2002, the figure grew to 11 percent.
Most agencies are owned by employees, with 79 percent saying they are wholly owned. Of the 21 percent not owned by employees, only 9 percent are owned by banks, the study found.
More agencies are reporting their embrace of technology. In 2000, only 33 percent of agencies said they had DSL or faster Internet connection. That figure rose to 76 percent in 2002.
Substantially more agencies, between 75 and 85 percent, said they were doing business over the Web including making billing inquiries and getting quotes. This compares to less than 30 percent to 50 percent in 2000.
About 1,700 agency principals responded to the study, with more than 1,450 responding by Internet.
Details of the findings are to be published over the next two months in the Agency Management Summary in hard copy and the 2002 Agency Universe Study Final Report, which will appear in CD format.
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