Agents Add $1.2B To Mass. Economy, Report Finds

Independent insurance agents in Massachusetts contributed a total of $1.2 billion to the state's economy, according to a study commissioned by the Massachusetts Association of Insurance Agents to measure the impact of independent insurance agencies on the state's economy.

The Framingham, Mass.-based association said the study, performed by Tillinghast, the insurance consulting business of Towers Perrin, surveyed 399 independent insurance agencies across the state. It found that the financial contribution of MAIA property-casualty member agencies was $1.194 billion in 2007.

Agencies were found to employ 11,452 employees, with the average independent agency employing 7.3 employees, and approximately 85 percent of the agencies having five or fewer employees.

Massachusetts independent insurance agencies provided the state's economy with a payroll of over $837 million in 2007. In addition to providing jobs for thousands of the state's residents, independent insurance agencies expended over $113 million in 2007 for employee benefits, including health insurance, pension, and profit sharing and training costs, according to the survey.

The survey found agencies also contributed over $80 million in state and local taxes during 2007. This amount reflects property and or real estate taxes, unemployment taxes and state income taxes. Federal income taxes and Social Security taxes were excluded from the study.

Approximately 78 percent of MAIA members rented, rather than owned, property for at least one agency location. During 2007, these agencies paid rent totaling in excess of $56 million, providing additional income to local communities throughout the state, said the study.

Massachusetts independent insurance agencies, said MAIA, also helped the local economy with spending over $97 million in 2007 on technology, office furnishings, supplies, equipment, advertising, legal and accounting services, repairs, maintenance, security, remodeling and construction.

The agencies also contributed over $8 million to charities, an average of over $5,200 per agency. The average charitable contribution by MAIA's largest agencies was almost $18,000 per agency.

The survey found that the majority of agencies could trace their agencies history back over a half-century or more.

Nine percent of the agencies were over 100 years old, 31 percent were between 51 and 100 years old, and 19 percent of the agencies were between 31 and 50 years old.

Francis Mancini, the association's president and chief executive officer, said the report was a follow-up to a similar one done about seven years ago. He said with so many changes having gone on in the state's insurance market since then, it was felt this would be a good time to update the report.