The 2014 Big “I” Market Share Report is based upon 2012 data
As it has done for the past 18 years, the Big “I” has issued its annual review of the property and casualty insurance marketplace using data provided by A.M. Best. This year’s report, which focuses on 2012 date, the latest year for which complete data is available, takes a look at the opportunities as well as the competitive challenges for Independent Agents and Brokers, particularly in the face of the ever-growing direct writers.
Highlights from the study
For the most part, this year’s Market Share Report showed that overall the independent agency system continues to rebound and grow with both personal and commercial lines approaching their “pre-recession” levels.
In the same vein, independent insurance agents and brokers continued to hold steady and actually grew their market share in several states, although not in the Commonwealth. Here is a snapshot from the report’s findings:
- IAs generated 58% of all the growth in the homeowners market, growing premiums by nearly 8% over 2011
- IAs grew personal auto premiums more than captive agencies companies
- IAs significantly narrowed the “growth gap” with direct response writers to $700 million
- IAs premiums grew $1.8 billion in 2012 versus direct response writer growth of $2.5 billion
- IAs still control a majority of the entire property & casualty market writing 57% of all premiums, include a third of all personal lines premiums
- IAs still dominate commercial insurance sales…controlling 79% of these markets
The in-depth report takes a look at the overall state of the personal lines market, commercial lines market as well as workers’ compensation markets in the United States and provides an interesting snapshot on how the independent insurance agency system is currently fairing.
How Massachusetts Independent Agents Are Fairing
While the report is more national in tone, on page 13 of the report, it did address the state of Massachusetts independent agents in its section on State-by-State Market Share Results: Personal Lines. Here’s what it had to say:
The extent to which independent agents have established themselves in the personal lines market varies considerably across the 50 states and the District of Columbia. In 2012, the range varied massively, from Massachusetts where IAs wrote 75.9% of premiums down to the much more modest market share of 14.2% posted by IAs in Alaska.
While New England states are a traditional stronghold for independent agents, several have seen
decreased share over the last several years. Once again, IAs in Massachusetts lost almost 1.5 percentage points of market share, dropping from 77.4% to 75.9%. From 2010 to 2012, the IA share declined 3.0 points.
However, Massachusetts was the only New England state that lost significant share in 2012. Maine, Connecticut, Delaware, and Rhode Island all held onto all but a fraction of 1 percentage point of their shares — each dropping less than 0.5 points. And in New Hampshire and Vermont, IAs lost only 0.6 and 0.7 points of market share respectively.
In response, MAIA President & CEO Frank Mancini says that if one looks deeper into the numbers, there is no cause for alarm as a result of this latest report. “I think that the reason you are seeing some slippage in personal lines, is due to the fact that we are still experiencing the effects of Managed Competition,” he explained as the reason for the drop in personal lines. “If I took a look at the report and if I did a breakdown, homeowners would probably be the same, while private passenger auto has dropped. Massachusetts agents still write 67 or 68 percent of the private passenger auto insurance market and its over 80 percent for homeowner’s insurance” adding that “…those numbers are pretty good.”
As such, while Massachusetts agents may have lost some market share, Mancini reminds agents that overall Mass. agents still have the highest market share in the country as compared to other agents in other states.
Interesting Charts from the Market Share Report
The following slide show is of some of the informative charts the Big “I” included in this year’s report.