Insurance Agencies & Brokerages
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 123,000 insurance agencies and brokerages in the US act as the “sales arm” of the insurance industry. Insurance agencies represent insurance carriers and sell policies to customers looking to minimize risks. “Captive” agents are affiliated with a single carrier. Independent agents may represent a variety of carriers. Brokers represent customers, and work with multiple carriers to determine the policy that best fits customer needs.
Cyclical Sales
The insurance industry is cyclical and premiums vary considerably depending on market conditions.
Government Regulation
Government regulation can affect insurance premiums, coverage, and commissions.
Industry size & Structure
A typical insurance agency or brokerage operates out of a single location, employs about 8 workers, and generates $1.6 million annually.
- The insurance agency and brokerage industry includes 123,000 companies that employ about 963,000 workers and generate about $191 billion annually.
- "Direct writers" (captive agents, direct sales via Internet, and affinity groups) account for 51% of total property/casualty insurance sales and "agency writers" (independent agents and brokers) account for 49%, according to A.M. Best.
- Direct writers account for about 67% of personal P/C insurance sales, while agency writers account for 74% of commercial P/C insurance sales.
- Independent agents account for 52% of new life insurance sales, captive agents account for 38%, direct marketers for 6%, and others (such as stockbrokers) for the remaining 4%.
- The industry is highly fragmented with the top 50 firms accounting for 28% of industry sales.
- Large companies include Marsh & McLennan Companies, Aon Corporation, and Arthur J. Gallagher.
Industry Forecast
Insurance Agencies & Brokerages Industry Growth
Recent Developments
Apr 10, 2025 - Homeowners Insurance Premiums Skyrocket
- US homeowners have had their insurance premiums go up by 24% over the past three years, according to a report from the Consumer Federation of America (CFA). Between 2021 and 2024, typical homeowners insurance premiums have risen by an average of $649 per customer. On a national level, that translates to a $21 billion price increase for homeowners insurance during the same time period, more than double the rate of inflation. The CFA found that premiums went up for 95% of US zip codes with the biggest increases coming from Utah (up 59%), Illinois (+50%), Arizona (+48), and Pennsylvania (+44). The most expensive states to insure a home were Florida, Louisiana, Oklahoma, Kentucky, and Nebraska. The steep price increases and the inability by some customers to find proper insurance in areas prone to natural disasters are creating an unsustainable affordability crisis in home insurance, according to the CFA report.
- The property and casualty insurance industry showed signs of stabilization in 2024 with growth in underwriting and premiums written, according to data from Verisk and The American Property Casualty Insurance Association. Insurers wrote $926 billion in premiums in 2024 - a 9% jump over the previous year. The industry also swung from a $28.1 billion loss in underwriting in 2023 to a $24.8 billion underwriting gain. The flip from one year to the next, the first time underwriting has recorded a full-year gain since 2020, is largely due to premium increases. The insurance industry still sees headaches ahead in 2025, particularly in the area of property insurance. Increases in instances of hurricanes, wildfires and other natural disasters in 2024 led to the second-highest year for catastrophic property payouts since 1950, per Verisk. The industry is adjusting its risk portfolio, raising premiums, and even exiting some markets as a result.
- Employment for insurance agencies grew by 4.2% year over year in December 2024, according to the US Bureau of Labor Statistics, which continues a steady trend of growth throughout the year. Employment is expected to level off in 2025 as insurers shift focus to revenue growth, per the annual Insurance Labor Market Study conducted by Jacobson Group and Aon. The report surveyed insurers with more than 200K employees and found 74% expect a focus on the bottom line versus 55% who intend to grow staff and 12% who plan to actually cut staff. Looking back on those stats for the past ten years, those numbers typically rise or fall together, but have consistently diverged since the pandemic. The report cites less underwriting from insurers, which translates into less claim processing, and continued climate-driven market exits by insurance companies as threats to hiring in 2025.
- Revenue for the insurance agency and brokerage industry surged 14.5% in the third quarter of 2024, according to the US Bureau of Labor Statistics. It is a familiar tune in the industry with quarterly revenue increasing each year since the lows of the pandemic in mid-2020. Profits, however, have been harder to come by. Increased claim losses from natural disasters brought on by climate change - and the propensity of consumers to keep building in disaster-prone areas - have hammered insurance companies across the industry. According to reinsurer Swiss Re, losses related to storms in the US have increased 8% each year for more than a decade. Policyholders who live in areas with increased threats of hurricanes, thunderstorms, or wildfires face continued rising premiums, possible policy cancellations, and stricter policy conditions.
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