6.7 C
Saturday, April 10, 2021

The number of independent agencies is decreasing a bit: Future One study

Must read

UK Time Newshttps://www.uktimenews.com
UK Time News is your daily dose of Latest News, Entertainment, Music, Fashion, Lifestyle, World, Cricket, Sports, Politics, Tech, Business News Website. We provide you with the Latest Breaking News Straight from the UK & all around the World on different categories.

Despite continued strength in agency mergers and acquisitions, the number of independent insurance agencies remained stable at 36,000, a number slightly lower than the last count of 36,500 in 2018.

That’s according to Future One’s 2020 Agency Universe Study, a collaboration of the Big “I” (Independent Insurance Agents & Brokers of America) and large independent agencies.

Bob Rusbuldt, president and CEO of Big “I”, said the survey reveals “good news for the independent agency system,” including the continued adaptation of digital innovations by agents. Trading conditions continued to improve in 2019, according to the survey, although at a slower pace than in 2018.

Due to the pandemic, the study was halted during its traditional commissioning period in March and restarted in September.

The study also reveals areas on which agencies should focus to better prepare for the future. “Women and people of color continue to be underrepresented as agency directors, and the Big ‘I’ is committed to continuing its outreach efforts to address this issue so agencies can better serve all insurance consumers, ”said Rusbuldt.

READ  5 things to know about the Macy's credit card - UKTN

Madelyn Flannagan, Big “I” vice president of agent development, education and research, said that while their agencies overall have performed well over the past year, agents are concerned.

READ  It's not too late to recover money 'lost' to COVID disruptions - UKTN

“In particular, as agencies express concern about emerging buying channels that threaten their consumer segment, the study revealed how adapting to social media and digital marketing strategies is critical to the success of agency, ”she said.

(According to another recent study, the JD Power 2020 US Independent Agent Performance and Satisfaction Study, agents said digital support could improve their satisfaction. Specific digital tools cited by agents focus on sales training and products and on identifying cross-selling opportunities. While these digital offerings are associated with high levels of agent satisfaction, they are used by less than 60% of agents.)

Selected results of the agency’s universe study 2020 include:

Business conditions remain favorable but growth is slowing. Trading conditions continue to improve. The majority of agencies (70%) report an increase in total turnover between 2018 and 2019, with an average increase of 20%. However, this figure is slightly lower than in 2018 when 76% reported an increase, with average increases of 25%. Agencies are slightly more likely to report increases in revenue from personal lines (67%) than commercial lines (63%).

READ  5 things to know about the Macy's credit card - UKTN

Emerging purchasing channels remain a matter of concern. The impact of emerging purchasing channels remains a concern, 35% of agencies believe that purchasing personal lines directly through the insurance company will have a significant impact on their agency over the next two years – and 27% believe the same problem will arise with purchases from insurance websites. About 1 in 4 people express similar concerns about small direct commercial purchases or purchases through emerging online vendors.

READ  Towergate buys AFL retail team, following AFL team's separate move last week

Inclusion continues to be a challenge. Women and people of color continue to be under-represented in the world of independent agencies. Forty-two percent of agency directors are women. Almost 9 out of 10 agency managers are white. Large agencies are particularly likely to have male directors or senior managers. However, new agencies are more likely to have at least one African American director (12% vs. 5% of established agencies).

The main aging remains constant. The aging of the universe of independent agencies is in line with the 2018 results, as the average age of agency managers is 55, of which 17% are 66 or older. Agencies may be starting to consider planning for perpetuation. Nine out of 10 have a perpetuation plan (tied with 2018), although it is often focused on children and family. Four in 10 anticipate a change of ownership within the next five years.

READ  5 travel tips from a historic globetrotter - UKTN

Social media and digital marketing strategies are essential. All of the top marketing strategies cited in 2020 are digital: social media and digital marketing (58%), agency website creation and maintenance (49%), agency website portal technology (30%) ), search engine optimization (30%) and electronic marketing activities (20%).

The study examines statistics on independent agencies operating in the United States, including their number, revenue base and sources, number of employees, ownership, composition of activities, product diversification, uses technology, non-insurance revenue sources and marketing methods.

The study also includes investigative questions related to the impact of COVID-19 on the independent agency channel, the results of which have been published separately.

Source: Big I

Interested in Agencies?

Receive automatic alerts for this topic.

More articles


Latest article