Independent Agents and Brokers Dominate Market

Independent insurance agents and brokers remain the dominant force in commercial lines and rival direct writers and captives in personal lines, according to the 2015 Market Share Study by the Independent Agents & Brokers of America (the Big “I”).

The study, based on market share and company expense data from A.M. Best Company, indicates that all property-casualty insurance premium lines grew from 2012 to 2013—their third straight year of growth. Personal and commercial lines jointly increased by $25 billion. The commercial insurance market alone grew by more than $35 million from 2010 to the end of 2013.

Independent agents and brokers increased their market share in about half the states across the country and the District of Columbia and wrote nearly 57% of all premiums in 2013. This includes nearly 35% of all personal lines premiums and almost 80% of commercial insurance sales.

Independent agents and brokers also do well when it comes to cost efficiencies in their businesses. In personal auto, both regional and independent agents had better average expense ratios than captive agencies in general, and about a dozen independents did as well as or better than direct response writers on expense ratios, the study says.

Premium growth in personal lines grew by $3.2 billion, neck-and-neck with the direct response writers at $3.4 billion. In homeowners, independents generated more than 57% of the market’s growth and exceeded their own previous performance by 8%. Independents also did well in personal auto, with their 2013 premiums nearly tying the entire direct response model.