75% of independent agencies report revenue gains from 2022-2023

Despite challenging conditions, 75% of independent insurance agencies reported revenue gains from 2022 to 2023, according to the 2024 Agency Universe Study. This number is significantly higher than from 2020 to 2021, when 62% of agents recorded earnings.

According to the findings of the biennial report, the average size of revenue gains in the 2024 study is 26%, and is on par with the average gain of 27% reported in 2022.

A total of 12% of agencies reported revenue declines in the 2024 study, a significant decrease from the 25% that reported declines in the 2022 study. The average decline in the 2024 study is 24%. In 2022, that number was 22%.

“Personal lines revenue grew significantly more in the 2024 study than in 2022, with 72% of agents reporting an increase compared to 60% in 2022,” according to a press release. “Commercial lines revenue also increased, with 68% of agencies reporting an increase, compared to 57% in 2022.”

The study was created by Future One, a collaboration of America’s independent insurance agents and brokers (“Big “I”) and independent management companies. A total of 1,269 agents from lists provided by Big “I” completed the online survey between March 21 and June 3. Big “I” and members of the carrier task force also shared the open survey link on their websites for agents to participate.

The study examines statistics about independent agencies operating in the US, including their number, revenue base and sources, number of employees, ownership, business mix, product diversification, uses of technology, non-insurance revenue sources and marketing methods.

According to the press release, the estimated total number of independent P/C agents and brokers in the US is 39,000. That’s down from 40,000 in 2022. The creators of the 2024 Agency Universe Study forecast that M&A activity and perpetuation challenges will continue to impact the agency channel.

One in three agencies expect a change of ownership in the next five years, according to the findings.

Related: Agents say outlook is positive: survey

When asked about challenges, more than half (56%) of agents ranked “finding carriers who will maintain their commitment to their market” as a 6 or 7 on a 7-point scale, where 7 is “extremely challenging “.

This number increased from 31% in 2022.

The next most pressing challenge was “having carriers address new personal lines risks by adding new products, services or coverages,” at 49 percent. Finding and selecting high-potential job candidates was the third most difficult issue at 46%.

On the technology side, the use of electronic communication tools has grown significantly, with agency use of electronic signature tools increasing to 70% in 2024 from 61% in 2022. The use of direct commission statements on invoice has also increased. That number was 52% in 2024 and 45% in 2022.

According to survey results, more than half of agents likely agree that policyholders are just as likely to accept electronic documents as paper. Forty-six percent agree that they have experienced significant cost savings by using carriers’ paperless communication options.

“This year’s study provides a valuable look at the independent agency ecosystem as it gains distance from the coronavirus pandemic and navigates the obstacles presented by the challenging market,” said Jennifer Becker, Big ‘I’s senior director of agency development, research and education. . “Technology adoption continues to prove to be a key strategy for success.”

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