The biennial study is a collaboration between the Big “I” and Future One
The outlook for the independent insurance agency system in 2014 and beyond is one of hope and stability according to the findings published in the recent 2014 Agency Universe Study. The study, issued every two years, is a collaboration between the Independent Insurance Agents & Brokers of America (Big “I”) and the Future One Coalition.
“The 2014 Agency Universe Study reveals good news for the independent agency system, including a stable business environment, improving business conditions and that the system as a whole is dynamic,” says Robert Rusbuldt, Big “I” president & CEO. “The independent agency system remains a growing distribution system that proved resilient
during the recent economic challenges.”
Acclaimed as one of the most comprehensive studies the independent insurance agency system, the Agency Universe Study compiles and reviews a copious amount of statistics and data tracing the operations of independent insurance agencies across the country. This data includes agency numbers, revenue base and sources, number of employees, ownership, business make-up, product diversification, use of technology in an agency, the existence of non-insurance income sources and marketing methods. Overall approximately 3,100 agencies were examined and included in the 2014 report.
The key findings of this year’s study
It appears that the most important and hopeful finding of this year’s report is that overall independent insurance agents have been able to hold their own over the last couple of years. Agency numbers have remained stable and many agencies are reporting increased profits and improved business conditions. In particular, as many agencies have had to adapt, change and modernize their ways of doing business, they have found new clients and increased revenue through focusing on niche and local markets.
“As the Big ‘I’ continues to increase its diversity awareness efforts, the 2014 Agency Universe Study found more progress toward efforts to focus on marketing to a more diverse clientele including efforts directed at specific generations,” says Madelyn Flannagan, Big “I” vice president of agent development, education and research. “Smaller agencies appear to be more focused on serving specific market populations, with nearly half indicating that they focus some of their marketing efforts on Gen X, Millennial and Hispanic markets.”
The following are the three major points, the Big “I” highlighted from the report:
The number of independent agencies is stable
After declining from 44,000 in 1996 to 37,500 in 2006 and remaining stable at 37,500 between 2006 and 2010, the number of independent agencies grew to 38,500 by 2012. In 2014, the estimated total number of agencies remains the same: 38,500.
Better business conditions
Business conditions continued to improve between 2012 and 2014, as they had between the 2010 and 2012 studies. In 2014, 70% reported increased revenue (for 2013 compared to 2012), compared to 60% in the 2012 study. Many agencies saw increased revenues in both personal lines and commercial lines.
Social media pros and cons
Agencies are starting to incorporate social media strategies into their marketing, but encountering some challenges. In 2013, 43% of agencies included social media in their marketing activities, primarily to build brand equity among prospects and customers. At the same time, 21% of agencies indicate that marketing the agency effectively on the internet is their top technological challenge (and 46% rank it among their top three challenges).
The Agency Universe Study has been published since 1983 and this year’s marks the eleventh issue. The cost of a copy of the full 2014 Agency Universe Report is $1,500 and can be ordered directly from the Big “I” website. There is also a 2014 Agency Universe Study Management Study available for purchase which costs $65.00. Both of these reports can be ordered directly from the Big “I” website and are delivered in an e-book format.
To order your copy of the 2014 Agency Universe Study or to simply head over to the Big “I” website, click here.