Independent agencies remain stable.(Industry IQ)

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The bi-annual 2010 Agency Universe Study, a collaboration between IIABA and Future One, a coalition of insurance company partners, indicates that the number of independent agencies remains stable at approximately 37,500 after a steady decade-long decline that ended in 2006.

Among the findings:

* When the decline began in 1996, there were 44,000 agencies

* The proportion of independent agencies with African-American principals grew from 1 percent in 2008 to just over 4 percent in 2010.

* Of the 37,500 agencies that exist today, 11 percent, or around 4,000, were founded between 2008-2010. That figure is equal to the number of agencies lost through mergers and acquisition.

* Since 2005, 50 percent of new agencies were located in the South; 24 percent were founded in the South Atlantic states--which includes Florida--and 19 percent in the West South Central portion of the country that includes Louisiana and Texas. By contrast, only 8 percent of new agencies were located in the Northeast, compared with 18 percent of older independent agencies. IIABA said the result may reflect the flexibility of the agency system that allows it to serve markets that captive agency companies have abandoned.

* The combination of the soft market and Great Recession of 2008 caused a decrease in revenue overall for independent agencies, particularly in commercial lines, mostly hurting larger agencies that are more dependent on commercial lines business. However, 55 percent of small agencies saw increases in revenue from 2008 to 2009, while 25 percent suffered decreases in revenue.

* The cost of technology is a less important issue than in the past. Marketing the agency effectively over the Internet, security and ease of use of new real-time functionality have become the top three technology issues for owners. Carrier websites also have gained ground as the preferred method for agencies and companies to do business.

This report is the 10th in a series of studies on independent agencies that dates back to 1983. Approximately 2,100 agencies were included in the study, which was conducted over the Internet. Copies of the study can be ordered by visiting the IIABA's website. The 23 page book is available as an e-book for $99.95.