IIABA Study Shows Agents Gained In ?02
By Mark E. Ruquet
NU Online News Service, March 18, 2:52 p.m. EST?Independent insurance agents during 2002 sustained a tiny loss in their share of the commercial and personal lines markets despite a healthy increase in dollar volume, according to a trade organization report.[@@]
The study by the Independent Insurance Agents and Brokers of America found independent agents continue to do the most writing of the commercial lines. For the personal lines, dominated by captive agents, the independent agents' market share was unchanged, but direct writers saw a slight up-tick.
The IIABA "2002 Property-Casualty Insurance Market Report: A Year of Growth and Opportunity" used data supplied by the Oldwick, N.J-based rating firm A.M. Best Company.
In 2002, overall, commercial business grew 19 percent to $203.3 billion. Because independent agents write slightly less than 79 percent of the business, they saw an increase in premium written of $25.4 billion.
On the personal market side, the overall business grew 11 percent to $188.35 billion. The independent agent's portion of the market grew by $6.7 billion.
"These figures reveal a continuing trend of significant growth for the independent agency system," said Robert A. Rusbuldt, the association's chief executive officer, in a statement. "Independent agents and brokers are moving in the right direction to become more cost effective and efficient when delivering high-quality insurance products."
However, the allocation of markets shows shifts, though they are slight.
On the commercial lines side, independent agents lost .26 percent of the business, going from 79.08 percent in 2001 to 78.82 percent in 2002. Captive agencies secured the independent agency business and saw their share increase from 31.91 percent in 2001 to 32.72 percent.
On the personal lines side, independent agents lost .06 percent, going from 36.33 percent to 36.27 percent. Direct writers increased their share of the business by .11 percent, going from 8.43 to 8.54 percent. Captive agency companies still dominate personal lines, controlling 55.19 percent of the business, though they did see a .05 percent loss.
The report noted, however, that Best's figures do not necessarily allocate distribution precisely. For instance, Progressive's independent agency business is not separated from its direct market business and Allstate's rural independent agent program is classified as part of its captive business. IIABA said it uses the numbers as given by Best and the rating firm decides what categories the business goes into.
A copy of the report is available at www.independentagent.com.
Madelyn Flannagan, vice president of education and research for the Alexandria, Va.-based association, said the IIABA was delayed in getting the report out this year, for 2002, but the report is always a year behind. The association will not get its figures for 2003 until late 2004, running 10 to 11 months behind in reporting, she said.
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