What is the strongest P&C distribution channel in the United States?


Of the $765 billion in total premiums written in the United States in 2021, personal insurance accounted for about 50% of total premiums, commercial insurance accounted for just over 38%, and the remaining 12% was “unclassified” coverage. which cannot be easily categorized. as personal or business lines.

IAs have shown complete dominance in commercial line distribution, placing nearly 88% of all premium underwritten commercial lines, according to the market share report. In personal lines, RNs placed 37% of written premiums, and in “unclassified” business, RNs placed 85% of written premiums.

“We own commercial lines,” Boggs told Insurance Business. “And our placement in personal lines is quite strong, given that there are four main methods of distribution within the system – AIs, captive agencies, direct writers and insurtechs. On this side, we place more than a third of the business in what is a four-way race.

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This AI dominance of distribution is not a well-told story. Boggs, who has worked in the industry for nearly 32 years, said he has heard about the impending demise of AI throughout his career. That’s because there’s always something new and exciting coming up – for example, insurtech – that threatens to take market share.

“Insurance is a financial mechanism by which people transfer their risk to an insurer in exchange for a promise of compensation if something goes wrong,” Boggs said. “It’s a very social and relationship-oriented business, which is about being able to talk to someone and ask for advice. The AI ​​system, although it may be damaged from time to time, will not be destroyed because it is based on relationships.

While the underlying concept of insurance is quite simple, it is often overshadowed by the complexity of insurance contracts. Understanding and explaining insurance contracts, coverage nuances and risk management requirements to clients is at the heart of the IA value proposition.

“You could probably create an algorithm for this, but I don’t think it works as well as having a person on an insured’s property, talking to them and listening to their wants and needs,” commented Boggs. “Again, it’s all about the relationship.”

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The 2022 Big “I” Market Share Report shows that nine of the top 10 lines written by RNs saw some growth in the five years ending in 2021, with the exception of personal injury compensation. work that has remained stable, potentially due to the impacts of the COVID-19 pandemic, such as business closures, layoffs, and remote working.

Boggs said he believes this positive momentum in AI distribution will continue, in part due to market conditions and the inflationary rating environment in commercial property coverage. Regardless of causality, he encouraged AIs to dispel any rumors of the agent’s disappearance and realize that this is a powerful distribution channel.

“It’s a place where you can have a career and a future,” he reiterated. “The last five years are proof that AI is not going away. We are not in danger of extinction next year unless something really weird happens. This is a career distribution channel. The information contained in our market share report is information only. How AIs apply it to their lives and daily lives is what’s important. »


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