Recently, the Independent Insurance Agents & Brokers of America (IIABA), also commonly referred to as the Big ‘“I”’, released its 2022 Market Share Report. The report presents U.S. Property & Casualty (P&C) premiums data collected during 2021 and provides agencies and carriers with insights on current market share distribution.
Along with helping insurance professionals understand the current market share, they can use the Big ‘“I”’ Market Share Report to discover new opportunities, verify (or disprove) assumptions, and review changes in historical data.
Let’s dig into some of the more revealing insights from this year’s report and discuss what these findings mean for insurance agencies and the carriers and brokers who work with them.
Independent agents dominate, especially in commercial lines
Of the $785 billion in P&C premiums sold in the U.S. in 2021, approximately 62 percent were placed by independent agencies. This makes the independent agency channel the current market share leader followed by captive agents at about 21 percent.
A further breakdown of the data shows us that independent agents continue to dominate when it comes to commercial lines. This year’s report concludes that nearly 88 percent of all commercial lines’ written premiums can be attributed to the independent agency channel. This number appears to be on track with the previous 2020 report which estimated the independent agency share of commercial line sales to be around 84 percent.
From this data, it’s clear independent agents are continuing to expand their share of the market and remain leaders within the commercial lines space. And their growth doesn’t end there. Independent agencies’ share of the personal lines premiums market is up 2 percent from 2020. Plus, this year’s report states that independent agents placed approximately 85 percent of all “unclassified” coverage in 2021.
Changes in the top ten lines of business written by independent agents
The Market Share Report also highlights the top lines of business placed by independent agents in the U.S. in 2021. When compared with past reports, there’s a drop in the percent written by independent agents for only one of the top ten lines of business — workers’ compensation. The other nine either increased or remained relatively steady.
As is the case with previous years, private passenger auto represents the largest premium line of business written by independent insurance agents in 2021 in the U.S. as a whole. But there are a few exceptions when the data is broken out on a state by state basis.
The top ten lines of business traditionally written by independent agents in order of highest to lowest percentage (with all other lines of business making up a combined 13 percent) are as follows:
- All Private Passenger Auto (18 percent)
- Homeowners Multi-Peril (12 percent)
- Other Liability, occurrence (11 percent)
- Workers’ Compensation (10 percent)
- All Commercial Auto (9 percent)
- Commercial Multi-Peril (9 percent)
- Other Liability, claims-made (8 percent)
- Inland Marine (5 percent)
- Fire Peril Only (3 percent)
- Allied Perils Only (2 percent)
The data says independent agencies are here to stay
Contrary to past predictions about the future role of independent insurance agents, the Big “I” 2022 Market Share Report makes it pretty clear that independent agencies aren’t going away anytime soon. But let’s not forget that this staying power hasn’t come easy. Agencies have had to adapt and innovate in order to remain in the game. The most successful independent agencies are continuing to leverage best practices through tech transformation and an evolving talent pool to guarantee future market share.
If you’re an agency owner looking to leverage new technology to grow your distribution channel and secure your place in the market, see how AgentSync can help.