Insurance Agencies & Brokerages


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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
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Oct 1, 2024 - Property and Casualty Insurance Returns Increase
                              • Improved underwriting and investment results in the first half of 2024 are driving increasing profits in the US property and casualty insurance industry, according to reinsurance and insurance firm Swiss Re. The industry’s combined ratio for year-to-date 2024 stands at 98% through October, marking a seven-percentage-point (ppt) improvement from the same period in 2023. This improvement is largely driven by an 11 ppt reduction in the personal lines loss ratio despite the pressure of severe convective storm activity on the homeowners' insurance sector. Premium growth remained strong at around 10% for the first half of 2024, mainly driven by personal lines, as competition builds among carriers reaching rate adequacy. Investment income has provided a tailwind due to reinvestment yields outpacing portfolio yields.
                              • North America is expected to contribute 42% to the growth of the global insurance market through 2027, according to Technavio. The global market is expected to grow at a compound annual growth rate of 7.6% during the forecast period. Restraints and challenges during the period include the increasing use of AI and alternative platforms in underwriting and claims assistance, as well as the need for tech-savvy salespersons to cater to commercial customers.
                              • A majority of agency employees who responded to a survey conducted for Vertafore's 2024 Insurance Agency Workforce Report said that they plan on staying in insurance at least six years. Many workers have already had a long career in the industry, with just over half having been in the industry more than 20 years. More than half of agency workers said that they are experiencing increased stress and a heavier workload.
                              • Insurance agency and brokerage industry employment increased slightly while wages for nonsupervisory employees increased moderately during the first seven months of 2024, according to the US Bureau of Labor Statistics (BLS). Insurance agency and brokerage revenue increased 9.6% year over year and 5.3% quarter over quarter in the first quarter of 2024, according to the US Census Bureau. Insurance agencies and brokerages slightly increased prices during the first seven months of 2024, according to the BLS.
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