NEW ORLEANS, September 20—Future One, a collaboration of the Independent Insurance Agents & Brokers of America (IIABA) and 19 leading independent agency companies, has introduced key preliminary findings from the 2002 Agency Universe Study—the most comprehensive demographic study of the independent agency system.
Previously issued every four years, the Agency Universe Study now highlights the critical issues and trends among independent agents on a biennial basis.
“The increased frequency will allow us to better gauge and respond not just to the dynamic changes in the industry but also to the subtle new trends,” says IIABA CEO Robert A. Rusbuldt. “As we have known for years, the independent agency system is in the midst of resurgence. The influx of new products, carrier innovation and consolidation trends have helped establish solid, technology-driven financial services firms that offer consumers the products they want with the personal approach and customer service they desire.”
In addition to traditional benchmark indicators, some notable issues from the new study include the growth of young agents, penetration of niche markets and agent response to customer service centers.
Key among the preliminary findings from the 2002 survey, the Agency Universe Study affirms a growing presence of younger individuals leading independent agencies. One in seven agencies experienced a change in ownership in the past two years. In 81 percent of the ownership transfers, the acquisition was made by another agency principal (62 percent) or an agency producer (19 percent).
Slightly less than one-third of all agency principals are younger than 45 years old and nearly three-quarters of all new agency principals are also in that age group. One-quarter of new agency principals are women, while just 12 percent of new agency principals older than 45 are women. However, 64 percent of principals less than 35 years of age and 39 percent of principals aged 35 to 44 work in agencies where an older principal owns a controlling interest in the agency.
Among the attitudinal differences between younger and older agents, those less than 35 years old give technology greater importance. Younger principals were more enthusiastic in support of technology to enhance education, research, agency management information, access to markets and 24/7 customer service.
A new trend cited in the study is the growth of customer service centers to manage client needs. Currently about 30 percent of agencies use the centers, and larger agencies are more likely to use service centers than their smaller counterparts. Agent satisfaction can best be described as temperate. Just 52 percent of agents voiced satisfaction with personal-lines call centers; the response dipped to 46 percent satisfaction for commercial-lines agents.
“While the implementation of the service centers by carriers might meet consumer and carrier desires for better accessibility to customer information, many agents have expressed lukewarm feelings about the use and implementation of the service centers,” says Madelyn H. Flannagan, IIABA vice president of education and research.
Additionally, almost 40 percent of agents are involved in niche or target marketing, with a concentration of agents—72 percent—in commercial endeavors. Commercial lines agents listed construction/contractors as their top niche; other target markets included agriculture and professional insurance (i.e. attorneys, architects, engineers, veterinarians). For personal-lines agents, non-standard and classic auto, coastal properties and mobile homes were top niches.
An agency’s ability to meet the special needs of customers as well as the relationship an agent holds with a carrier likely to underwrite the specialty risk were cited most often as the key factors in providing a niche focus. Agents also cited the special skills of a producer and access through an association representing the market. This, however, is not a new trend as agents reported that they had served their particular target market for an average of 21 years.
A complete summary of the 2002 Agency Universe Study will be available next month.
Founded in 1896, IIABA is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life and health—as well as employee benefit plans and retirement products. Web address: www.independentagent.com.