The P&C market continues to thrive, growing by $25 billion in 2013—the most recent year for data, according to the 2015 Market Share Study from the Independent Insurance Agents & Brokers of America.
Independent agents and brokers still control a majority of the entire P&C market, and wrote nearly 57% of all premiums. When only considering commercial lines, independent agents hold a significant advantage over direct writers, taking 80% of the market for $210.9 billion. Since 2010, this segment has grown by $35 billion.
Independent insurance agency system strong & growing
"The Big 'I' is pleased to announce that the independent insurance agency system continues to be stable, strong and growing," says Bob Rusbuldt, Big 'I' president & CEO, in a statement. "Among the many pieces of good news the study revealed are that all propertycasualty insurance premium lines grew for the third year in a row, bouncing back from their recessiondriven low points in 2010. After three years of strong growth, both personal and commercial lines have exceeded prerecession volumes, and combined are now generating $532 billion in annual premiums."
Independent agents (IA) with national carriers wrote 45% of the commercial market in 2013, however their share decreased 1.2 percentage points from 2012. IA with regional carriers picked up their share by 1.4 percentage points. This continues a trend seen over the last eight years, the Big "I" reports. The share for national IAs has decreased by 4 percentage points, while regional IAs has grown by almost 3 percentage points. Captive carriers fluctuate between 18.4% and 20.1% of the market during this time, and direct writers continue to write miniscule amounts of the market—writing $2.5 billion in 2013 (less than 1%)and growing by 0.3 percentage points over eight years.
When broken by segment, commercial auto brought in $26.9 billion in premium, of which IAs secured $22.7 billion. IAs continued to show dominance in this segement, and wrote $1.5 billion of the $1.7 billion in new premiums in 2013. Regional IA carriers were responsible for most of this, writing $1.2 billion. Captive agencies grew premium by $200 million and now control 15.4% of the market. When considering that direct writers bring in 0.3% of the commercial auto market, this data suggests that they have been unable to replicate personal auto success in this segment, the Big "I" says.
The workers' compensation segment had a strong 2013, and recorded 8.1% growth in premiums. With $45.8 billion in premium, workers' comp comprised 18.6% of the overall commercial P&C market. Most of this growth came from IA writers. Regionals grew an incredible 15.6%, and brought in $19.6 billion. National IAs increased 4.8% to $22.5 billion.
Personal lines market
In the personal lines market, regional IAs have proven that they can compete with captives and direct writers. In 2013, regional IAs grew personal premiums by $5.5 billion, which is half of the total amount of new premiums written in that year. Total written premium came in at $266.1 billion, and IAs write nearly 35%.
Over the past 19 years reported, regional IA carriers grew market share by 8.5 percentage points, and now write 26.7% of the market. National IA carriers cannot say the same—their market share is less than one-half of what it was in 1995, dropping down to 7.5%. During this same time, captive agency carriers lost 8.8 percentage points, however, they still write just slightly more than 50% of the market. Direct writers more than doubled their market share in this time, and now write 14.9%, the study reports.
Personal auto premiums written by independent agents grew nine times more in both 2013 and 2012 than they did in 2011, growing by $1.8 billion. Regional IA carriers write 25.9% ($47 billion) of this line and national IA carriers $9.8 billion. As expected, captives write the majority—52.6%—with $90.1 billion.
Independent agents slightly increase their market share in homeowners, writing 41.3% of $80 billion in premium. On a year-over-year basis, regional IAs increased their share by 6.5 percentage points since 2005, but national IAs dipped by nearly 4 percentage points.
This is the 19th year that the Big "I" has analyzed industry market share and company expense data with A.M. Best Co.
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