2016 Future One Agency Universe Study. Highlights

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Shavonne Bradley
6 years ago
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1 2016 Future One Agency Universe Study Highlights 1

About Overview the Agency of Methodology Universe Study Online survey conducted biennially WHEN The 2016 AUS fielded March 2 through April 18 In 2016, 1,972 respondents (primarily agency principals)

WHO Sampling frame: IIABA membership list, as well as eight carrier provided lists Data weighted by estimated revenue size distribution among all independent agencies to more accurately reflect

2 About Overview the Agency of Methodology Universe Study Online survey conducted biennially WHEN The 2016 AUS fielded March 2 through April 18 In 2016, 1,972 respondents (primarily agency principals) were included in analyses: 1,420 who completed the entire questionnaire and 552 who completed at least the first two key sections. WHO Sampling frame: IIABA membership list, as well as eight carrier provided lists Data weighted by estimated revenue size distribution among all independent agencies to more accurately reflect independent agency universe WHY To help: Independent agency principals understand how peers operate, helpful business strategies Carriers understand agency revenue sources/changes, technology use, carrier support, etc. IIABA with supporting data for public release, legislative efforts, and to understand how to best help independent agencies 2

3 Topics for Today Current IA Landscape Marketing Trends Distribution of agencies by revenue Business conditions Perpetuation challenges Emerging channels Targeting strategies Marketing priorities Technology and social media Marketing challenges 3

4 Current Independent Agency Landscape 4

5 The estimated number of IAs stands at 38,000, fluctuating between 37,500 and 39,000 since 2004 Total Number of Independent Agencies, ,000 42,000 40,000 39,000 37,500 37,500 37,500 38,500 38,500 38, Total # Agencies/ Brokerages of All Types % Independent P&C Agencies/Brokerages US Department of Labor, Bureau of Statistics Census of Business Past AUS findings Dun & Bradstreet database 5

6 In 2016, 21% of all independent agencies and brokerages are Small, and 53% are Medium Small Agency Distribution by Revenue Size: 2014 vs % 1.6% 3.6% 5.9% 6.3% 3.5% 16.9% 14.5% Jumbo $10M+ Large $2.5 $9.9M 57.3% 53.4% Medium Large $1.25M $2.49M Medium $500K $1.249M Medium Small $150K $499K 15.0% 21.1% Small <$150K

7 Business conditions remain favorable Change in Total Revenue 2014 vs Decrease: 16% New Producer Hiring in Past 2 Years Same: 10% 74% say total revenue increased 37% hired new producers between 2014 and 2016 Increase: 74% Represent an average of 7 standard personal lines carriers and 5 standard commercial lines carriers 72% use market access providers, most often MGAs and wholesale brokers 7

8 Aging of the IA universe may be slowing Age of Agency Principals 2012 Mean age = 54 12% 9% 14% 20% 18% 17% 10% Mean age = 56 12% 8% 12% 14% 18% 18% 18% Mean age = 55 10% 10% 13% 17% 18% 15% 17%

9 But perpetuation challenges exist Time At Which Agency Anticipates Major Ownership Change Obstacles to Future Ownership of Agency Within 3 years 18% Within 3 5 years 22% 60% More than 5 years 2 in 10 Not sure what net worth of agency is No talent available to succeed Among agencies with at least one principal age 66+, 23% say it will be at least five years before any ownership transition 9

10 Direct purchase is the largest near term concern Anticipated Impact on Agency of Emerging Purchase Channels and Trends (Over Next Two Years) No Impact (Codes 1,2) Moderate Impact (Codes 3,4,5) Significant Impact (Codes 6,7) Direct purchase through insurance company 13% 51% 36% Non insurance websites 30% 51% 19% Usage based insurance 34% 50% 16% Sharing economy 47% 39% 14% Retail stores 39% 47% 14% Driverless cars 58% 29% 13% Drones 58% 32% 10% 10

11 Marketing Trends 11

12 Agencies are most likely to target by age for personal lines, and by business size for commercial lines % Reporting Agency Targets Each Population Group: Personal Lines Gen X Gen Y/Millennials Latino/Hispanic Women African American/Black 18% 17% 23% 36% 42% Asian Indian/South Asian American 9% Lesbian, Gay, Bisexual, Transgender 9% East Asian American/Pacific Islander 8% American Indian or Alaska Native 9% None of above 47% % Reporting Agency Targets Each Account Type: Commercial Lines Small businesses (<50 EEs) Medium businesses ( EEs) Minority owned businesses Female owned businesses 14% 11% 26% 81% Large businesses (500+ EEs) 6% None of above 15% 12

13 Social media use is on the rise Percent Including Each Activity as Part of Marketing Program (Mentions 30% or more) Total 2016 Total 2014 Creating/maintaining website 65% 71% Social media presence 56% 48% Print advertising (exc. phone directory) 38% 44% Search engine optimization 35% 30% Yellow pages advertising 31% 42% Direct mail 30% 40% Creating/maintaining portal technology 30% 32% ^ 2016 Social Media Channels Used Sometimes/Often (Among Those That Include Social Media in Marketing Program) 61% 45% 22% 15% 8% 7% 13

14 Agency website maintenance and social media activities are considered most important Ranked Among Top Three Most Important Marketing Activities Creating/maintaining agency website 61% Social media/digital marketing 48% Search engine optimization 31% Creating/maintaining portal technology on website 25% Print advertising (excluding telephone directory) Agency sponsored events for clients Direct mail Broadcast advertising Client industry associations e marketing activities Yellow pages advertising Outdoor advertising 19% 17% 16% 15% 14% 14% 12% 9% Development of digital content 4% 14

15 Building brand equity is key social media objective Top Ways in Which Agency Uses Social Media Build agency s brand (87%) Attract new prospects (87%) # of Staff Hours/Week Devoted to Social Media Activities 13% 22% 49% 17% to 5 6+ Provide clients with insurance info (64%) Establish agency industry expertise (54%) Contact clients in disaster situations (46%) Follow carriers for product info (39%) Follow carriers for corporate news (36%) % Empower Staff to Interact with Via Social Media 9% Yes (PL) 2% Yes (CL) 50% Yes (Both) 39% No 15

16 At the same time, agencies continue to face challenges in marketing themselves effectively Top Three Technology Challenges 57% 36% Marketing agency effectively on the Internet Keeping pace with technology changes Other Significant Challenges 43% Having sufficient marketing/advertising budget to promote agency 36% Building strong internet presence to attract prospects and clients Accessing Prospects 53% Strongly agree they need a way to access well qualified PL prospects looking for insurance on the Internet 16

17 Six in ten IIABA members are aware of the Best Practices program TrustedChoice.com Awareness and Use of IIABA Initiatives: Agencies From IIABA Member List 89% Among those aware, % who use* 59% Young Agents 74% 11% Virtual University Best Practices Program 59% 63% 56% 24% Agents Council for Technology InVEST 35% 40% 22% 15% Diversity Task Force 13% 5% * Use = currently participate in or use study findings from any of these programs. 17

18 Thank You. Questions: Madelyn Flannagan 18

Eligibility Federal Tax ID Goods and services your company provides Total number of employees Total revenue last year

Eligibility Federal Tax ID Goods and services your company provides Total number of employees Total revenue last year Small and Diverse Business Profile Preparation Guide This guide provides a list of required fields necessary to complete the Supplier company profile. There are additional non mandatory fields not listed