Insurance Agencies & Brokerages

The 120,430 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.

Sep 24, 2026 - Stronger Underwriting Lifts Insurance Industry Profits

• US property and casualty insurers nearly tripled their net underwriting income to about $31 billion in the first half of 2026, according to AM Best, as the business of writing insurance became considerably more profitable. The industry’s combined ratio improved four percentage points to 92.5, meaning insurers kept a healthier cushion between the premiums they collected and what they spent on claims and expenses. That helped push overall net income up more than 50% to roughly $78 billion. What makes the results more striking is that premium growth actually slowed: net written premiums increased just 2.1%, compared with 5.2% a year earlier. The newfound breathing room is already bringing more competition to commercial property, where insurers have more capacity and pricing has begun to fall. Commercial auto and umbrella coverage remain tougher territory as claims costs stay elevated.
• Independent insurance agencies remain the dominant force in commercial insurance and are gaining ground with consumers. According to the Big “I” 2026 Market Share Report, independent agents placed 62% of all US property and casualty premiums in 2025, up slightly from 61.5% a year earlier. Their position is particularly strong in commercial lines, where independent agencies wrote 87% of premiums. They are also making gradual gains in personal lines, with their share reaching 39%, up from 36% in 2021. Customers continue to turn to independent agents to compare carriers, navigate coverage restrictions, and find specialty coverage. Meanwhile, agency networks are giving smaller firms greater access to carriers and technology that once favored larger brokerages, allowing them to gain some benefits of scale while remaining independent.
• Cyber insurers are scrambling to figure out where autonomous AI fits into policies written for a bygone world of human hackers and clearly defined cyberattacks. AI agents can now make independent decisions after receiving an initial instruction, creating losses even when they have legitimate access to company systems. That complicates basic questions around what counts as a cyber event, who is liable, and whether coverage applies. Insurers including MSIG, QBE, and Beazley are reviewing policy language, although most are clarifying existing coverage rather than broadly excluding AI risks. The stakes are growing quickly: Munich Re estimates the global cyber insurance market could rise from nearly $15 billion in 2025 to about $28 billion by 2030, while Aon expects nearly 20% of cyberattacks to involve generative AI by 2027. With little claims history, insurers also face the challenge of pricing a risk that is still taking shape.
• Auto insurers are increasingly closing claims without making payments, particularly for liability and medical coverage, according to the Wall Street Journal. In 2025, 45% of resolved auto liability and medical claims resulted in no payment, up from 35% in 2016, based on analysis of regulatory filings. Liability and medical claims are more complex, costly and prone to disputes than vehicle-damage claims, which have maintained stable payment rates. Insurers attribute rising nonpayment rates to fraud, litigation, higher deductibles and tighter claim controls, while consumer advocates say carriers are becoming more aggressive in limiting payouts. Insurers are also increasing scrutiny of policy requirements, such as whether all regular or household drivers have been disclosed. State Farm recently strengthened its policy language after estimating that undisclosed driver accidents cost the company nearly $1.5 billion annually. Nonpayment rates vary by insurer and state, reflecting differences in policy terms, deductibles, regulations and litigation environments.

Industry size & Structure

A typical insurance agency or brokerage operates out of a single location, employs about 7 workers, and generates $1.7 million annually.

• The insurance agency and brokerage industry includes 120,430 companies that employ about 807,000 workers and generate about $207.1 billion annually.
• Direct writers account for about 37% of personal P/C insurance sales, while agency writers account for 62% of commercial P/C insurance sales.
• Independent agents account for 53% of new life insurance sales, captive agents account for 38%, while direct marketers and others (such as stockbrokers) make up the rest.
• 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.