INDEPENDENT AGENTS AND BROKERS SHOW MARKET SHARE GAINS

Rough Notes, May 2004

Independent agents and brokers continue to dominate commercial lines and have experienced steady growth in personal lines, according to the 2002 market share study conducted by the Independent Insurance Agents & Brokers of America (IIABA).

The report shows that the commercial lines market grew 19% to $203.28 billion in 2002, with independent agents and brokers writing nearly 79% of the business. Because of the rise both in the market and in market share, independent agents and brokers experienced an increase in premium of $25.4 billion. In 2001, independent agents and brokers wrote nearly 75%, or $169.9 billion in direct written premium, of the commercial lines market.

In 14 states and the District of Columbia, independent agents and brokers write more than 80% of the commercial lines market. The top five markets in independent agent and broker commercial lines market share are Hawaii, Rhode Island, Massachusetts, the District of Columbia, and Maryland. Additionally, independent agents and brokers write 57% to 80% of the business in the commercial lines markets of the remaining states.

The personal lines market also experienced healthy growth in 2002, finishing the year at $188.35 billion, with independent agents and brokers writing slightly more than 36% percent of the business. As a result, the agency system added $6.7 billion in premium in the personal lines market segment. This is an increase from 2001 figures in which agents wrote $169.4 billion in direct written premium, or 35%, of the personal lines business.

In Massachusetts, independent agents and brokers write 78.87% percent of the personal lines market. Maine, Vermont, Connecticut, and Ohio agents and brokers follow with between 50% and 61% of the market share. Independent agents in 11 states have more than 40% market share. In 17 states, however, they write only 20% to 30% of the personal lines market.