Fitness and sports clubs provide $768.6 million in commercial lines premium in the United States or 0.6% 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 67.4%. This is a growing market, with each segment showing real average growth.
Membership sports and recreation clubs represent the largest subgroup in this category, providing $312.3 million in premium and a loss ratio of 61.0%. It is followed by physical fitness facilities, with $223.5 million in premium and a loss ratio of 74.0%. Racing, including track operations, is next, with $134.9 million in premium and a loss ratio of 74.2%; then comes sports clubs, managers and promoters, with $97.9 million in premium and a loss ratio of 63.5%.
"This is a market that tends to be handled by specialists due to the large potential liability exposure. In fact, liability coverages represent 67.8% of the total commercial lines premiums written for this niche, followed by workers compensation (18.0%), commercial property (11.9%) and commercial auto (2.2%)," Lindsay Smith, president of IMR Corp., one of the PLP Companies, points out.
"This niche is an important one for independent agents because of the large number of small and medium-sized businesses that comprise this market. Of the 28,885 fitness and sports clubs, 28,000 are small and medium in size and provide $515.9 million in premium."
The 28,885 fitness and sports clubs in the United States employ 535,376 people. There are 21,750 small clubs (employing fewer than 20 people) which account for $158.0 million in premium for an average premium of $7,265 per account. There are 6,250 medium-sized accounts (20-99 employees) providing $358.0 million in premium for an average of $57,275. The 847 large clubs (100-499 employees) account for $193.1 million in premium and an average of $227,975 per account. The 38 jumbo accounts provide $59.5 million for an average of just under $1.6 million per account.
Fitness and sports clubs provide $213.5 million in premium in the Rough Notes Northeast region. The loss ratio is 76.7%. Membership sports and recreation clubs represent the largest subgroup, providing $80.4 million in premium and a loss ratio of 68.8%. Physical fitness facilities are next, with $64.4 million and a loss ratio of 81.0%. It is followed by racing, including track operations ($38.1 million, 85.5%); and sports clubs, managers and promoters, with $30.6 million in premium and a loss ratio of 77.3%. There are 6,460 fitness and sports clubs in the Northeast, employing 105,982 people. The 5,040 small firms (those employing fewer than 20 people) account for $47.7 million in premium for an average of $9,465 per account. The 1,269 medium-sized accounts (20-99 employees) provide $97.0 million in premium for an average of $76,440 per account. The 145 large firms (100-499) account for $50.9 million for an average of $351,020 per account, and the 6 jumbo accounts provide $17.9 million for an average of $2.98 million per account.
Information on this niche market is available from IMR at 39 E. Hanover Ave., Morris Plains, NJ 07950, or call (888) 237-7066.*
©COPYRIGHT: The Rough Notes Magazine, 1998