75% of Independent Agencies Report Revenue Gains From 2022-23

Despite challenging conditions, 75% of independent insurance agencies saw revenue gains from 2022 to 2023, according to the 2024 Agency Universe Study. That number is significantly higher than between 2020 and 2021, during which 62% of agencies experienced gains.

According to the biennial report’s findings, the average size of revenue gains in the 2024 study is 26% and is on par with the average gain of 27% reported in 2022.

A total of 12% of agencies reported decreases in revenue in the 2024 study, marking a significant drop from the 25% that reported decreases in the 2022 study. The average drop recorded in the 2024 study is 24%. In 2022, that number was 22%.

“Personal lines revenue has grown significantly more in the 2024 study than in 2022, with 72% of agencies reporting an increase compared to 60% in 2022,” a press release said. “Commercial lines revenue grew as well, with 68% of agencies reporting an increase compared to 57% in 2022.”

The study was created by Future One, a collaboration of the Independent Insurance Agents & Brokers of America (Big “I”) and leading independent agency companies. A total of 1,269 agents from lists provided by Big “I” completed the online survey from March 21 to June 3. Big “I” and carrier task force members also shared the open survey link on their websites for agents to participate.

The study examines statistics about independent agencies operating in the U.S., including their numbers, revenue base and sources, number of employees, ownership, mix of business, diversification of products, technology uses, non-insurance income sources and marketing methods.

According to the press release, the estimated total number of independent P/C agents and brokers in the U.S. is 39,000. That is a decrease from 40,000 in 2022. Creators of the 2024 Agency Universe Study forecast mergers and acquisitions activity and perpetuation challenges to continue to impact the agency channel.

One in three agencies expects an ownership change in the next five years, per the findings.

Related: Agents Say Outlook Positive: Survey

When asked about challenges, more than half (56%) of agencies ranked “finding carriers that will maintain their commitment to their market” as a 6 or 7 on a 7-point scale, where 7 is “extremely challenging.”

That number was up from 31% in 2022.

The next-most pressing challenge was “having carriers that are addressing new personal lines risks by adding new products, services or coverages,” at 49%. Finding and screening job candidates with strong potential was the third-most challenging issue at 46%.

On the technology side, the use of electronic communication tools has increased significantly, with the use of agency e-signature tools increasing to 70% in 2024 from 61% in 2022. The use of direct bill commission statements has also grown. That number was 52% in 2024 and 45% in 2022.

According to survey results, more than half of agents are likely to agree that insureds are just as likely to accept e-documents as paper. Forty-six percent agree they have seen significant cost savings by using carriers’ paperless communication options.

“This year’s study provides a valuable look at the independent agency ecosystem as it gains distance from the coronavirus pandemic and navigates the obstacles presented by the hard market,” says Jennifer Becker, Big “I” senior director of agent development, research and education. “Technology adoption continues to prove itself as a key strategy for success.”