Independent agents continue to hold a large piece of the commercial insurance market, with an 84.5 percent share in 2019, a slight increase from the 84.2 percent in 2018, according to the 2020 Market Share Report, which became available Dec. 17.
Captive and direct response carriers decreased their market share of commercial lines by 0.10 percent combined, providing the bump to the independent agency distribution channel. Captive agents held a 14.9 percent share of the market, while direct response companies held a 0.65 percent share.
The report’s data is from AM Best, and the analysis has been completed by the Big I. This year’s report marks the 25th year in which AM Best Company provided the Big I with year-end industry market share data for an updated assessment of the state of the independent agency system.
The 2020 report reflects analysis of data for select property/casualty premiums by line for the years 2017 through 2019, including personal auto, commercial auto, homeowners, commercial multi-peril, commercial group and workers’ compensation. Accident and health premiums were not included in the report.
Independent agency companies wrote 35.7 percent of all personal lines in 2019, up 2.3 percent from 2017. Direct response companies’ market share grew by nearly 4.0 percent, while captive carriers lost 4.0 percent.
In 2019 direct written premium in the private passenger auto line amounted to $253.2 billion, an increase of 9.7 percent over the $230.9 billion written in 2017. For independent agencies (national and regional), direct written premium increased 10.7 percent in the private passenger auto line. Independent agencies held 34.5 percent of the market. They were eclipsed by captive agents who held 43.5 percent of the market.
In the homeowners line, total direct written premium increased 10.5 percent, from $94.3 billion in 2017 to $104.1 billion in 2019. Independent agents, regional and national, had 47.7 percent of the homeowners market in 2019, while captive agents held 44.8 percent of the market. For all independent agents together, the increase in direct written premium in the homeowners line was 15.6 percent from $42.9 billion in 2017 to $49.6 billion in 2019.
The U.S. commercial insurance marketplace grew by 11.6 percent, from $297.9 billion in direct written premium in 2017 to $332.6 billion in 2019. Independent agency carriers share grew by 12.0 percent, from $250.9 billion in 2017 to $281.0 billion in 2019.
The total U.S. market for commercial auto amounted to $45.1 billion in 2019, up 26.0 percent from $35.8 billion in 2017. Regional and national independent agency companies had 86.0 percent of the commercial auto market in 2019, while captives had 14.0 percent. Independent agency carriers’ commercial writings were up 23.7 percent in 2019 amounting to $38.6 billion, up from $31.2 billion in 2017.
Workers’ compensation total U.S. direct written premium was down 7.9 percent in 2019 when compared to 2017, decreasing from $55.6 billion in 2017 to $51.2 billion in 2019. Independent agencies held 89.4 percent of the workers’ comp market, their writings were down 3.3 percent, from $51.4 billion in 2017 to $49.7 billion in 2019. Captives reported writing 10.6 percent of the workers’ comp direct written premium in 2019. Direct response writers reported no written premium in the workers’ comp line.
Regional and national agencies wrote 81.6 percent of the commercial multi-peril direct written premium, while captives wrote the remaining 18.4 percent. Total U.S. writings for the line increased 7.9 percent, from $40.3 billion in 2017 to $43.6 billion in 2019. Independent agencies wrote $32.6 billion of the commercial multi-peril line’s direct written premium in 2017 and $35.6 billion in 2019, an increase of 9.2 percent.
Independent agency writers’ market share of select other lines mentioned in the report include: fire, an 83.29 percent market share; inland marine, a 74.44 percent market share; medical professional liability, a 75.39 percent market share; other liability (claim-made), 93.50 percent; other liability (occurrence), 86.73 percent, and products liability, 93.9 percent.
In the years 2017 through 2019 direct written premiums across all lines reviewed increased 4.7 percent overall.
Over the last three study cycles (2016-2019), no notable gains or losses were indicated in any of the data by distribution channel.