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I I A B A N E W S:
Massachusetts Independent Insurance Agents Lead Nation in Market Shares
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The Independent Insurance Agents & Brokers of America (IIABA) recently released the result of its annual market share report (2004 data). The results were not surprising. Independent insurance agents in Massachusetts continue to be the market share leader in private passenger auto, homeowners and personal lines. In commercial lines, Massachusetts independent insurance agents are second only to agents in Hawaii in market share. Let’s look at the numbers. (The source of all data in the IIABA study is A. M. Best Company and are used by permission.)
Personal Lines
Massachusetts independent agents write 85.35% of the personal lines in the state. Trailing in second place is Maine where independent agents write 58.77% of the personal lines in the state. The national average for personal lines written by
independent agents is 36.57%, with Arkansas being the lowest with an independent agent market share of 20.51%.
In the private passenger auto insurance line, Massachusetts independent agents write 85.15% of the market. Maine independent agents follow next with a 56.00% market share. Nevada independent agents have the smallest private passenger auto market share at 19.46%.
The homeowners insurance line again has Massachusetts independent agents leading in market share with an 86.05% share. Maine independent agents are again second with a 66.36% market share. Arkansas independent agents trail all others with a homeowner market share of 16.78%.
Commercial Lines
Massachusetts independent agents had to accept second place in market share in commercial lines. Hawaii independent agents lead the nation in commercial lines with a 90.80% market share. Massachusetts’ independent agents market share is 87.41%. The national average for independent agent market share in commercial lines is 80.22%. Delaware independent agents have the lowest commercial lines market share with a 58.20% share.
Agency Companies Hold Own Against Captives and Direct Response
On the next page there are four charts which will show how independent agency companies (both national and regional) have fared against captive agency companies and direct response companies in market share over the last three years. (Note: The traditional “direct writers” are split into captive agency companies and direct response companies.) In each case, independent agency companies have either increased market share or maintained their market share from the previous year. These figures indicate that the independent agency companies and their agents are holding their own against the onslaught of multi-million dollar advertising by direct response companies and lure of the internet to purchase insurance.
| Personal Lines Market Share |
2002 |
2003 |
2004 |
| National Agency Companies |
13.39% |
13.05% |
13.31% |
| Regional Agency Companies |
22.74% |
23.28% |
23.26% |
| Captive Agency Companies |
54.47% |
53.73% |
53.09% |
| Direct Response Companies |
11.05% |
11.80% |
12.36% |
| Personal Auto Market Share |
2002 |
2003 |
2004 |
| National Agency Companies |
11.74% |
11.33% |
11.58% |
| Regional Agency Companies |
23.15% |
23.73% |
23.86% |
| Captive Agency Companies |
54.05% |
53.15% |
52.20% |
| Direct Response Companies |
9.40% |
9.94% |
10.33% |
| Homeowners Market Share |
2002 |
2003 |
2004 |
| National Agency Companies |
18.80% |
18.42% |
18.43% |
| Regional Agency Companies |
20.94% |
21.50% |
21.15% |
| Captive Agency Companies |
55.99% |
55.67% |
55.79% |
| Direct Response Companies |
4.27% |
4.41% |
4.63% |
| Commercial Lines Market Share |
2002 |
2003 |
2004 |
| National Agency Companies |
48.62% |
49.64% |
49.48% |
| Regional Agency Companies |
31.32% |
30.86% |
30.74% |
| Captive Agency Companies |
19.80% |
19.24% |
19.50% |
| Direct Response Companies |
0.26% |
0.26% |
0.27% |
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B I T S & P I E C E S :
SDIP Q&A Available at massagent.com® ... |
Now that all of our 2006 Auto Change Seminars and our online Lunch ‘n Learn “webinar” have been completed, we have posted a series of questions and answers regarding the new SDIP on massagent.com. To download this 10-page document, go to massagent.com/info/sdipqa.pdf. Other downloadable documents which you may find helpful in understanding the 2006 changes AND explaining them to your clients include:
- One-page explanation of SDIP Plan.
- One-page explanation of operator assignments (AIB Rule 28)
- One-page SDIP “Cheatsheet”.
If you have trouble downloading any of these files, please contact Donna McKenna or Kathy Cormier at the MAIA offices by phone at 800-972-9312 or 508-628-5452 or by email at dmckenna@massagent.com or kcormier@massagent.com.
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More on CO Detector Requirement ... |
In November 2005, Governor Mitt Romney signed “Nicole’s Law” which places requirements on owners of all residential properties to install and maintain carbon monoxide (CO) alarms. The Board of Fire Prevention Regulations has developed the regulation (527 CMR 31.00) establishing the specific requirements of the law
including the type, location, maintenance and inspection requirements for the alarms.
To help consumers understand and comply with the new law, the Massachusetts Department of Fire Services has posted a new brochure — Consumer’s Guide to Massachusetts Requirements for Carbon Monoxide Alarms — on the state’s website: www.mass.gov/dfs/osfm/pubed/flyers/carbon_monoxide_safety_guide.pdf .
As this edition of The Massachusetts Agent went to press, the State Fire Marshall announced thatconsideration is being given to granting a 60 day extension on compliance with the law due to the fact that most stores are running out of CO detectors. We’ll keep you posted on this important issue.
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| Agent Awareness Campaign Begins Seventh Year … |
On April 10, 2006, MAIA will launch the seventh year of the Agent Awareness Campaign (click here for ad schedule). Over the six years of the campaign, MAIA and our company partners have expended over $2.7 million for radio advertising promoting the value of doing business with an independent insurance agent. The 2006 campaign will run for at least ten weeks (Spring, Summer, Fall) on 23 stations through the state.
We have produced three new ads for this year’s campaign. Beginning in June with the next flight of ads, we will be acknowledging our company partners for 2006. Please review the ad schedule and tune-in to your favorite station to hear the new ads.
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| John P. Nixon Insurance Agency Awarded Five Star Agency Award of Distinction … |
John P. Nixon Insurance Agency in Newtonville recently underwent an intensive insurance agency “fitness” exam in order to be awarded the coveted Five Star Insurance Agency Award of Distinction. The Five Star Agency designation is awarded by the MAIA to an independent insurance agency that successfully completes a “fitness review” that examines 17 elements of agency performance including: Customer Focus, Communications, Vision, Planning, Accountability, Selection, Development, Involvement, Motivation, Information, Business Associates, Innovation, Integration, Carriers/Markets, Business Results, Performance and Reliability.
Frank Mancini, President and CEO of MAIA, said, “The Five Star Insurance Agency Award of Distinction recognizes an agency for excellence in every area of its operations. We call the process of earning the designation a ‘fitness review’ because, in order for the agency to qualify, agency personnel must jump a number of hurdles to earn their place among the best agencies in the state.”
Nancy Gardner, President of Nixon Insurance Agency attributed the agency’s success to its dedicated, motivated team of players whose primary focus is on providing top-notch customer service to clients. “At the Nixon Agency, we strive for continuous improvement of the products and services we offer. We are proud of the role each and every member of our staff plays in our operations and in our achievement of the Five Star Agency award. In addition, we are active and supportive of numerous community and charitable organizations. We’re proud to be a good corporate neighbor and enjoy the excellent reputation and name recognition our involvement in the community has earned us,” concluded Gardner.
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