38,500 strong.
The results of the 2014 Future One Agency Universe Study are in, and they show that the number of independent agencies in the U.S. has remained stable over the past four years—likely the result of slightly fewer new agencies being founded and the continued merger and acquisition activity in the channel. Other notable results from the new study: indicators show that business conditions have improved for agencies, market access providers are playing a large role in the marketing and placement of business and that independent agencies are beginning to realize the need to market to a more diverse population.
The study found that 70% of agencies saw increases in both personal lines and commercial lines revenue, up 10% over the past study. This growth in revenue created a shift in the average size of independent agencies into the Medium-Small category, which reflects a revenue size of $150K-$499. This group now accounts for 57% of agencies, while small agencies with revenues of <$150 dropped to 15% of the agency population. The revenue increases are a reflection of the increase in overall industry premiums during the 2012-2013 recovery from the 2008 recession.
Smaller agencies appear to be more focused on serving specific market populations, with nearly half indicating that they focus some of their marketing efforts and dollars on Gen X, millennial and Hispanic markets. This is likely due to the ownership of these smaller agencies, which tend to have one or more minority principal, as well as one or more principals under the age of 40.
One new trend that emerged in 2012 continues in the 2014 study: Market access providers play a major role in independent agency business placement. Agencies of all sizes—in both personal and commercial lines— are placing business with market providers. The change appears to be fueled by agencies moving into more specialized and target markets which require industry-specific products for their niches
The Agency Universe Study is a survey of independent insurance agencies and is a cooperative effort of the Independent Insurance Agents & Brokers of America (IIABA) and 19 leading independent agency companies. First conducted in 1983, the study is conducted biennially to track the fast-paced changes within the independent agency system.