The total number of independent agencies in the United States remains stable at 38,500, according to the 2014 Future One Agency Universe Study.

The number has remained stable over the past four years, thanks in part to a slight slowdown in new agency establishment and ongoing growth in merger and acquisition activity. Key among the preliminary results from the 2014 study is the finding that 70% of agencies saw increases in both personal lines and commercial lines revenue—up 10% since the previous study.

The revenue increases reflect the increase in overall industry premiums during the 2012-2013 recovery from the 2007-2008 recession. Small agencies were least likely to report an increase (58%) while jumbo agencies were most likely to report an increase (93%). Between 2012 and 2013, 69% of agencies reported an increase in personal lines revenue and 62% reported an increase in commercial lines revenue.

This growth in revenue created a shift in the average size of independent agencies from the small to the medium-small category (less than $150,000 to $150,000-$499,000, respectively): medium-small agencies now account for 57% of agencies, while the proportion of small agencies dropped to 15% of the agency population.

The study also reports that smaller agencies appear to be more focused on serving specific market populations, with nearly half indicating they focus some of their marketing efforts and dollars on Gen X, millennial and Hispanic markets. This is likely to the result of ownership trends for these smaller agencies, which tend to have one or more minority principal or one or more principals under the age of 40.

But the average age of principals with 20% or more ownership in their agencies is 56 years old, with 18% of those principals age 66 or older compared to just 10% in 2012. Nevertheless, the vast majority (82%) of agencies does not anticipate a major ownership change for at least three years—and 60% do not anticipate a change for more than five years.

One newer trend that emerged in 2012 reappears in the 2014 study: Market access providers continue to play a major role in independent agency business placement for agencies of all sizes and for both personal and commercial lines. Fueling the change is movement into more specialized and target markets as agencies seek industry-specific products for their niches.

The Agency Universe Study, a survey of independent insurance agencies, is a cooperative effort of the Big “I” and 19 leading independent agency companies. First conducted in 1983, the study now occurs biennially to track fast-paced changes within the independent agency system.

For more information about the 2014 Agency Universe Study, contact Madelyn Flannagan. In the meantime, pre-order a copy of the 2014 Future One Agency Universe Study Summary Report.

Madelyn Flannagan is Big “I” vice president, agent development, research and education.