A Billion-Dollar Impact On The Economy
According to the latest results of the Massachusetts Association of Independent Agents Economic Impact Survey, IAs in the Commonwealth contributed an impressive $1.022 billion to the Massachusetts economy in 2017. This fact is even more impressive in the face of the continue consolidation of the independent insurance agency marketplace.
The study, commissioned by MAIA and conducted by Willis Towers Watson, surveys the approximately, 1,200 member agencies of the MAIA that reside in the Commonwealth. The agencies are queried as both employers, consumers, taxpayers, and active participants within the 351 communities they inhabit throughout the Commonwealth.
The results were published in the September 10th Edition of the MAIA’s The Massachusetts Agent newsletter.
How IAs Actually Contribute To The Commonwealth’s Economy
MAIA member agencies were responsible for employing approximating 9,050 full time employees in Massachusetts during 2017. On average, the typical agency employed 12 individuals paying salaries totaling more than $714 million. Agencies also paid an additional $107 million in employee benefits such as health insurance, pensions, profit sharing, and training costs.
As for taxes, independent insurance agencies paid a total of more than $80 million in both local and state taxes last year (2017).
Rental income and consumer spending are two other revenue streams in which independent agents and their agencies make significant contributions to the local economy. According to the MAIA survey, total insurance agency rental spending topped $36 million in 2017.
Independent insurance agencies spending on other expenses, such as technology, office furnishings, supplies, equipment, advertising, legal and accounting services, repairs, maintenance, security and construction, exceeded more than $73 million during the same period of time.
A Point To Note With The Commonwealth’s Consumers
As this year’s Economic Impact Study illustrates and as the MAIA noted in their report, independent agent’s contributions both as employers and taxpayers is something that sets IAs apart from the direct writers and other companies not based in the Bay State. It is an important point for the local insurance community here to emphasize how they contribute to the local communities throughout the Commonwealth.
Our members’ agencies have deep ties in their communities. They employ local people, support local businesses, and generate substantial tax revenue, all while serving consumers’ interests first,” said Nicholas A. Fyntrilakis, MAIA’s President & CEO. “Conversely, online direct writers often have little presence in the state aside from their websites and advertising campaigns, and are focused on how quickly they can generate the next sale, irrespective of the needs of the consumer.”
Deep roots in their communities
One of the most compelling findings of the latest economic survey were the deep roots that many independent insurance agencies continue to have in their local communities. Eleven percent of local independent insurance agencies have been doing business in Massachusetts for over 100 years. An additional 37% of independent agencies are between 51-100 years old. In this day and age, the fact that these small businesses have continued on for a century employing local members of their communities is something that she be both noted and celebrated.
Independent agents in Massachusetts also espouse the saying “Charity begins at home.” All together, Massachusetts independent agents contributed approximately $8.6 million to charities in 2017, not counting the “countless” hours of volunteer work these agencies and their employees have performed on behalf of their local communities.
In sum, what this latest Economic Impact Survey shows is that while independent agencies have a significant monetary impact on the Massachusetts economy, the full extent of their influence and important to Massachusetts as a whole is immeasurable.