Artisan contractors provide a total of $6.99 billion in commercial lines premium in the United States or 5.5% 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 50.6%. There are 390,514 artisan contractors in the United States, employing more than 3.1 million people.
"Artisan contractors represent an attractive niche market for independent agents, since most of them are small and medium sized businesses (1-19 and 20-99 employees, respectively), prime targets for agents," notes Lindsay Smith, president of IMR Corp., one of the PLP Companies. "There are two billion-dollar subniches in this group. Contractors in plumbing, heating and air conditioning provide $1.76 billion in premium and a loss ratio of 41.1%. Those engaged in electrical work account for $1.04 billion and a loss ratio of 48.3%."
Other important artisan contracting groups are roofing, siding and sheet metal work, with $611.9 million in premium and a loss ratio of 58.6%; concrete work ($494.7million, 47.1%); plastering, drywall and insulation ($403.7 million, 52.5%); and excavation work ($374.4million, 59.0%).
There are 358,208 small contractors (employing fewer than 20 people) in this group which account for $3.49billion in premium for an average premium of $9,755 per account. There are 29,664 medium-sized accounts (20-99 employees) providing $2.52 billion in premium for an average of $85,075. The 2,560 large firms (100-499 employees) account for $850.3 million in premium and an average of $332,135 per account. The 82 jumbo accounts provide $123.6 million for an average of $1.51million per account.
Artisan contractors provide $1.65 billion in premium in the Rough Notes West region. The loss ratio is 49.8%. Contractors in plumbing, heating and air conditioning are the largest subgroup, accounting for $348.8 million in premium and a loss ratio of 40.1%. Contractors engaging in electrical work are next, with $218.4 million and a loss ratio of 45.7%. They are followed by roofing, siding and sheet metal work ($152.4 million, 57.6%); plastering, drywall and insulation ($143.8 million, 48.6%); concrete work ($138.9 million, 46.7%); carpentry work ($97.5million, 52.0%); and painting and paper hanging ($71.5 million, 53.3%). There are 77,277 artisan contractors in the West, employing 663,721 people. The 70,368 small contractors (those employing fewer than 20 people) account for $776.2 million in premium for an average of $11,030 per account. The 6,308 medium-sized accounts (20-99 employees) provide $624.4 million in premium for an average of $98,980 per account. The 579 large firms (100-499) account for $218.6 million for an average of $377,570 per account and the 22 jumbo accounts provide $32.1 million for an average of $1.46million 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, 1999