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Insurance Agencies Industry Profile Excerpt
| SIC Codes: 6371, 6411 NAICS Codes: 5242 Page Length: 10-12 Last Quarterly Update: 6/9/2008 View Sample Industry Profile |
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About 130,000 insurance agency and broker offices in the US generate annual revenues of $85 billion. Large companies include Marsh & McLennan, Arthur J. Gallagher, and Aon. Despite the prominence of large companies in the commercial segment, the industry remains highly fragmented: the largest 50 firms only hold 20 percent of the total market. The average office has five employees and generates less than a million dollars in annual revenue. An insurance agent works on the insurance company's behalf; an insurance broker on the customer's behalf. Many companies on the commercial side function mainly as brokers.
COMPETITIVE LANDSCAPE
Demand is related to consumer income and the volume of commercial activity. The profitability of individual agencies depends on effective marketing. Large agencies have advantages in name recognition, connections with more insurers, and the ability to craft more complex insurance packages. Small agencies can compete successfully by specializing in a product, industry, or market. Average annual revenue per employee is close to $200,000.
PRODUCTS, OPERATIONS & TECHNOLOGY
The three broad categories of insurance are property and casualty (P/C), which generates about 60 percent of annual industry revenue; health, about 12 percent; and life, which generates 10 percent. Within the P/C segment, commercial insurance accounts for 60 percent of revenue. Because of the very different insurance issues involved in each, many agencies handle only one type of insurance. Agencies may also specialize in selling to individuals, businesses, or groups. Agencies ...
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