ALEXANDRIA, VA – Despite the hard market, business conditions for property & casualty independent insurance agencies continue to be favorable with the number of agencies experiencing revenue gains up significantly, according to the 2024 Agency Universe Study. However, the number of independent p&c agencies in the U.S. has dropped slightly from the previous study in 2022.
Future One, a collaboration of the Big I” and leading independent agency companies, has released key findings from the recently completed Agency Universe Study, hailed as the most comprehensive look at the independent agency system.
The 2024 Agency Universe Study once again shows the independent agency channel’s capability to adapt and overcome challenges, as agents across the U.S. continue to improve operations and client communications during the hard market, even with the difficult headwinds they have confronted,” says Charles Symington, Big I” president & CEO.
The study also identifies key areas in which agencies need support, including market and product access, client communication and technology underscoring the importance of maintaining strong agency-carrier relationships, especially in the current market.
Independent agencies are essential partners in the insurance distribution ecosystem and the Big ‘I’ is proud to support them with the resources and guidance they need to serve their communities,” Symington says.
The study looks at statistics about independent agencies operating in the U.S., including their numbers, revenue base and sources, number of employees, ownership, mix of business, diversification of products, technology uses, non-insurance income sources and marketing methods.
This year’s study provides a valuable look at the independent agency ecosystem as it gains distance from the coronavirus pandemic and navigates the obstacles presented by the hard market,” says Jennifer Becker, Big I” senior director of agent development, research and education. Technology adoption continues to prove itself as a key strategy for success.”
This year’s study saw significant increases in adoption of digital communication tools, with many changes in service and operations prompted by the hard market and its impact,” Becker says.
Key findings from the 2024 Agency Universe Study include:
• The number of independent agencies dropped slightly. In 2024, the estimated total number of independent p&c agents and brokers in the U.S. stands at 39,000, a decrease from 40,000 in 2022. Mergers & acquisitions activity and perpetuation challenges continue to impact the agency channel with 1 in 3 agencies expecting an ownership change in the next five years.
• Most agencies make revenue gains despite business conditions. Three in 4 agencies (75%) saw revenue gains in the 2024 study significantly higher than the 2022 study, in which 62% saw gains. Meanwhile, 12% of agencies saw decreases in revenue, with an average decrease of 24%. Personal lines revenue has grown significantly more in the 2024 study than in 2022, with 72% of agencies reporting an increase compared to 60% in 2022. Commercial lines revenue grew as well, with 68% of agencies reporting an increase compared to 57% in 2022.
• The hard market is top of mind for agencies. More than half (56%) of agents say that developing talking points for customers about the hard market and coverages is the most important factor to succeed, surpassed only by identifying operating efficiencies (63%). More than 1 in 4 agencies have made digital service and digital interaction operating changes due to the hard market.
• Agencies outline market challenges. Agencies are appointed with an average of 17 carriers. As many as 21% of agencies say carriers are meeting the market challenges extremely poorly, while 68% believe carriers are meeting the market challenges moderately well. However, 11% percent of agencies believe carriers are meeting the challenges of the hard market extremely well.
- When asked what their No. 1 challenge is, 56% of agencies said it was finding carriers that will maintain their commitment to their market, up from 31% in 2022. The second most pressing challenge was having carriers that are addressing new personal lines risks by adding new products, services or coverages,” at 49%. Finding and screening job candidates with strong potential was the third most challenging issue at 46%.
• Agencies continue to adopt technology. The use of electronic communication tools has increased significantly, with the use of agency e-signature tools increasing to 70% in 2024 from 61% in 2022. The use of direct bill commission statements has also risen since 2022, at 52% in 2024 versus 45%. More than half of agents are likely to agree that insureds are just as likely to accept e-documents as paper. Nearly half—46%—agree they have seen significant cost savings by using carriers’ paperless communication options.
- However, challenges with technology continue. Dealing with multiple carrier interfaces was the No. 1 technology issue for agents, followed by marketing their agency effectively on the internet.
• Social media continues to be an important marketing activity. More than half of agencies (56%) say social media is a top marketing activity, a slight decrease from 62% in 2022. Agencies most often rely on Facebook, LinkedIn and Instagram. Social media is primarily used to build the agency’s brand (87%) and attract prospects (79%).
• Emerging purchase channels remain a concern. Agencies continue to express concern about emerging purchase channels and their impact on their business. One-third believe their agency will be impacted by personal lines and small commercial lines products purchased directly through insurance companies, non-insurance websites and emerging online channels. However, nearly half of agencies believe the independent agency channel is extremely resilient to marketplace changes.
The Agency Universe Study was first conducted in 1983. Since 2002, the study has been completed biennially. Since 2004, the Agency Universe Study has relied on internet data collection. In total, 1,269 respondents were included in the 2024 study, conducted by Zeldis Research in cooperation with Future One.
In addition to the Big I,” the Future One coalition includes the following company partners: Amerisure; Central Insurance Companies; Chubb; CNA; Foremost, A Farmers Insurance Company; The Hanover Insurance Group; Hartford Steam Boiler (HSB); Liberty Mutual Insurance/Safeco/State Auto Insurance; National General, an Allstate Company; Nationwide; Progressive Insurance; Selective Insurance; Travelers; and Westfield Insurance.
Source: Independent Insurance Agents & Brokers of America
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