©COPYRIGHT: The Rough Notes Magazine, 1998
Advertising agencies and other firms engaged in the communications field provide $261.9 million in commercial lines premium in the United States or 0.2% of total commercial premiums written, according to data obtained from IMR (Insurance Market Research) Corp.'s database of insurance marketing information. The loss ratio is 58.4%. This is a growing market, enjoying strong real growth and premium growth.
"There are 52,676 of these firms across the country, with the majority of them being small or medium-sized businesses, prime targets for independent agents," notes Lindsay Smith, president of IMR Corp., one of the PLP Companies. "These businesses employ 501,960 people. This relatively high level of employment makes workers compensation the most important line for this market, representing 43% of total commercial lines premiums. However, liability and commercial auto also are extremely important considerations, accounting for 29.5% and 17.2% of premiums, respectively. Commercial property accounts for 9.9% and boiler and machinery 0.4%."
The markets covered in this report are advertising agencies; outdoor advertising services; radio, television and publisher representatives; direct mail advertising services; photocopying and duplicating services; commercial photography; commercial art and graphic design firms; and secretarial and court reporting services.
There are 47,751 small markets in this group (employing fewer than 20 people) which account for $107.8million in premium for an average premium of $2,260 per account. There are 4,309 medium-sized accounts (20-99 employees) providing $87.9 million in premium for an average of $20,400. The 560 large firms (100-499 employees) account for $46.9 million in premium and an average of $83,800 per account. The 56 jumbo accounts provide $19.3 million for an average of $343,975 per account.
These businesses provide $44.5 million in premium in the Rough Notes Midwest region. The loss ratio is 52.4%. Advertising agencies represent the largest subgroup, accounting for $18.4 million in premium and a loss ratio of 54.7%. Commercial art and graphic design firms are next, with $7.1 million and a loss ratio of 51.9%. They are followed by direct mail advertising firms ($4.6 million; 48.3%); photocopying and duplicating services ($3.9million; 50.4%); and secretarial and court reporting services ($1.9 million; 50.8%).
There are 9,856 establishments in this group in the Midwest, employing 97,437 people. The 8,894 small firms (those employing fewer than 20 people) account for $18.4million in premium for an average of $2,070 per account. The 843 medium-sized accounts (20-99 employees) provide $15.4 million in premium for an average of $18,245 per account. The 108 large firms (100-499) account for $8.0 million for an average of $74,395 per account, and the 11 jumbo accounts provide $2.7 million for an average of $245,300 per account.
Information on this niche market is available from IMR at 39 E. Hanover Ave., Morris Plains, N.J. 07950, or call (888) 237-7066. *
©COPYRIGHT: The Rough Notes Magazine, 1998