Independent Agents Gain Marketshare

The IIABA said in its report that A.M. Bests 2001 figures reveal that "the marketshare trends and company-expense comparisons point to a time of unprecedented opportunity for independent agents and brokers."

The independent agency system finished 2001 with a 74.96 percent share of the commercial lines market–up 1.71 points from the previous year. The increase yielded $2.9 billion in additional premium volume to the independent agency system, IIABA noted.

Independent agents and brokers wrote 82.22 percent of the commercial auto, and 80.70 percent of the commercial multiple-peril markets, both up slightly from 2000 figures.

"The independent agency systems share of the overall commercial market is actually even higher, but is artificially reduced due to A.M. Bests categorization of the California State Compensation Fund as a captive-agent company despite placement of most of its premium volume–$3.6 billion–by independent agents and brokers," according to IIABA.

"Even without this amount factored into their data, independent agents and brokers still captured 68.85 percent of the workers compensation market," technically down from the 72.3 percent share posted the prior year.

In personal lines, independent agents and brokers added 1.47 points of marketshare, taking them above the 35 percent mark for the first time in several years, according to IIABA. This growth added $2.5 billion in written premium at the expense of captive-agent writers, the association noted.

"Independent agents and brokers have done an extraordinary job winning back marketshare in personal lines, especially during this period of vulnerability for captive-agent companies," said IIABA Chief Executive Officer Robert A. Rusbuldt.

"Consumers are increasingly recognizing that independent agents and brokers are the best when it comes to taking the time and energy to help them understand their policies and the options available to them," Mr. Rusbuldt added.

State-by-state data shows that Massachusetts independent agents and brokers have the highest shares in both commercial lines (85.73 percent) and personal lines (77.89 percent).

In the commercial lines market, independent agents and brokers write more than 80 percent of the policies in nine states and the District of Columbia, and hold between 75- and 80 percent marketshare in 23 other states.

Vermont, Maine, Ohio and New Hampshire round out the top-five state personal lines marketshares for independent agents and brokers, each writing between 50- and 61 percent. An additional 11 states have more than a 40 percent share.

However, opportunity for growth exists in 23 states where independent agents and brokers have only 20-to-30 percent of the personal lines market share, according to IIABA.

The personal lines and commercial lines markets as a whole showed steady growth in 2001. Commercial lines grew 16.5 percent to $169.9 billion in direct written premium, surpassing personal lines for the first time in several years, while personal lines realized 8.2 percent growth to finish the year at $169.4 billion, according to IIABA.

A complete copy of IIABAs marketshare report is available at www.independentagent.com.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, December 2, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.