The independent agent is part of the fabric of the U.S. insurance marketplace and regardless of technological innovations and disruptions, those that stay relevant will continue to play a key role in insurance distribution in the future. To maintain a profitable business and meaningful career, however, the independent agent will need to evolve.
One only needs to look at the numbers to see how much change is happening, but the tried and true independent agent model is not going anywhere. In fact, more and more exclusive agents are converting their agencies to an independent model. Data posted by the Insurance Information Institute show that the number of independent agents in the U.S. has remained stable in recent years, dropping by only 500 agents to 38,000 from from 2014 to 2016. According to the Association of Independent Agents and Brokers, this stability is partly due to “stable rates of exclusive agency conversions from captive to independent and new agency formation.”
Independent agencies made up more than 45 percent of net premiums written in the property and casualty space in 2016. The same group made up 28 percent of the homeowners market and 27 percent of the personal auto market. Further, the data showed agency writers, including independent agencies, brokers, general agents and managing general agents, made up more than 66 percent of net premiums written in the commercial space in 2016.
These numbers help demonstrate that if independent agents accept the changes heading their way and evolve to meet them, there is nothing to stop them from continuing to build on the success of past generations. So how can independent agents embrace change and continue to build their agencies?
Read the full article, written by Matt Masiello, Executive Vice President and COO of SIAA, published March 16, 2018 in The Standard.