REGIONAL TARGET MARKETS
By James Surrago
Baked goods manufacturers comprise a small but important slice of the food manufacturing industry. Countrywide, 3,600 manufacturers of baked goods employ more than 225,000 people and generate more than $185 million in premiums.
The baked foods manufacturing industry consists of bread, cake and related products manufacturers (SIC 2051); cookies and crackers (SIC 2052); and frozen bakery products, except bread (SIC 2053).
Over the most recent five-year period (1996-2000), countrywide premium for all property/casualty lines decreased by 1%, but there was a 19% deterioration in industry loss ratio. The changes in the five-year period loss ratios and premiums by specific industry slice are as follows in the first chart.
More than 60% of the premium volume countrywide is generated by the workers compensation line, followed by general liability (12%), commercial fire and allied lines (12%), and commercial auto lines (16%). The remaining property/casualty lines have a negligible portion of the premium market, with boiler and machinery at about 1%.
The mix of business by line is generally consistent by region. The commercial lines premiums for each of the individual lines show almost no change over the most-recent five-year period.
Small business establishments--each employing fewer than 20 employees--number over 2,100, or 60% of the countrywide total, and generate 9% of total premiums. The average account size for small establishments is $8,100. The small establishments show the highest five-year growth among all business groups, with premium growth of 12% and an 18% growth in the number of establishments.
More than 900 mid-sized establish-ments--each employing between 20 and 99--generate $45.6 million in commercial lines premium. The average account size is $50,200, and premium growth is 3% over the five-year period.
The more than 500 establishments in the large and jumbo-size category--each employing more than 100--account for 66% of the premium. The average account size for large establishments is $174,000 and $528,000 for jumbo accounts. There is a 10% decrease in premiums during the five-year period. Still, these two categories are very important to the industry.
The Rough Notes Northeast region represents more than $54 million in premiums for all property/casualty lines.
The Northeast has more than 1,000 establishments and employs almost 49,000 people. The industry loss ratio for the region is 12% better than the countrywide loss ratio.
The Northeast has by far the largest number of industry establishments and the highest direct written premium volume (30%) countrywide.
The Northeast has the most small and mid-sized establishments among all regions, but fewer large and jumbo establishments. Without the higher average account premiums generated by large and jumbo accounts, the region's average account size is $48,570, which is about 6% lower than the countrywide average.
The permium volume for each of the three industry groups is a s folows in the second chart
Information on this and other niche markets is available from ISO by calling toll free: (800) 888-4ISO (4476) or e-mail: info@iso.com.
James Surrago is vice president - Data Management & Information Services of the Insurance Services Office, Inc. (ISO).
| SIC | Industry Description | 5-year Growth | 5-yr Change |
| Premiums | Loss Ratios | ||
| (-deterioration) | |||
| 2051 | Bread, cake & related products | -1.3% | -24.0% |
| 2052 | Cookies and crackers | -4.9% | -11.5% |
| 2053 | Frozen bakery products, no bread | 12.6% | 8.2% |
Source: ISO Market Profiler
| SIC | Industry Description | Northeast | US Total $ DWP | |
| $ DWP (000) | ($000) | |||
| 2051 | Bread, cake & related products | $39,581 | $139,021 | |
| 2052 | Cookies and crackers | $10,335 | $33,007 | |
| 2053 | Frozen bakery products, no bread | $4,482 | $13,192 | |
Source: ISO Market Profiler