The elections, health care reform and increasing property-casualty pricing are among the significant issues and events that affected independent insurance agents in 2012. And although Superstorm Sandy devastated Northeast properties—including some agency offices—this year also showed promise for the IA system with agencies increasing their ranks and revenues. While growth was small, the increase topped IN&V editors’ list of the most influential stories of the year:

Independent insurance agencies boost revenue and ranks in a soft economy.

While profitability remained flat for most agencies, organic growth helped produce new revenues for firms of all sizes, the 2012 Best Practices Study Update shows, based on 2011 data. And the number of U.S. independent agencies rose by 1,000 to 38,500 over two years—a small but significant gain that was the first uptick after six years of stagnant levels, the 2012 Agency Universe Study reports. Former captive agents founded many of these new independent agencies in the South, where captive companies are becoming reluctant to write because of hurricane exposures.

Superstorm Sandy rocks the Northeast, likely ranking as one of the world’s most expensive insurance disasters.

Even though the October storm’s private insured losses—that is, claims other than those for federal flood insurance—could rack up to $25 billion, the industry remains financially sound. Still, it will be sorting out Sandy’s effects for some time because of the unprecedented values exposed to loss; a combination of damaging storm surge and tricky flood perils; pollution, mold and indirect loss resulting from business interruption; diminution of value and government-restricted access to businesses. Agents are helping clients navigate such claims, while coping with damage to their own offices and homes.

Health care reform takes further shape.

Details and implementation of the Patient Protection and Affordable Care Act (PPACA) continued to trickle out in 2012, even as the law survived challenges for repeal. The U.S. Supreme Court upheld the law, and the 2012 election results—which maintained the balance of power in Congress—translate to no realistic chance at wholesale repeal. Many states are expected to or are already moving forward with their portion of implementation, including state exchange creation and navigator programs. The Big “I” continues to call for changes to PPACA provisions that harm the association’s small business members and consumers, and it is working toward solutions that will address agent and consumer issues through the regulatory process and legislation where appropriate.

Property-casualty pricing trends upward—though there’s no hard market yet.

Composite p-c rates for commercial and personal lines continued to increase in 2012 since turning positive in late 2011 after years of negative pricing. One key factor influencing property pricing is a multi-year trend of interior and coastal losses from U.S. disasters. Agents have faced the challenge of explaining rate hikes to cash-strapped clients, who are continuing to deal with a tough economy.

Following the election, a status-quo Congress and White House will address agent issues.

With the election over, the Obama Administration is expected to forge ahead with implementing health care and financial services regulation reforms. The Big “I” will continue to tackle these and other issues that are expected to be addressed by the 113th Congress, including terrorism risk insurance, tax reform, insurance regulation, agent licensing and crop insurance. The Big “I” is positioned to be a key player in the upcoming session. Its political action committee, InsurPac, distributed $1,843,500 in support of 282 U.S. Senate and House races in the 2012 election, winning 236 of them for an 84% victory rate. This participation affirmed the association’s reputation as a leading industry voice in the nation’s capital.

Congress passes a long-term extension and reforms for the National Flood Insurance Program.

Years of hard work by the Big “I” finally came to fruition in July when President Obama signed a new law that extends the National Flood Insurance Program (NFIP) for five years, until Sept. 30, 2017, and aims to modernize the program. The law includes changes that the association advocated for, such as phasing out subsidies for many properties, raising the cap on annual premium increases to 20% from 10%, imposing minimum deductibles for flood claims, requiring the NFIP administrator to develop a plan for repaying the debt incurred from Hurricane Katrina and establishing a technical mapping advisory council to deal with map modernization. The balanced, bipartisan law protects both consumers and taxpayers, and as discussion regarding the impact of Hurricane Sandy continues in 2013, the association is staying on top of this critical debate.

The benefits market evolves.

The trend of major long-term care insurance providers ceasing to write new business or exiting the market continued in 2012. One of the primary motivating catalysts was the long-term position of the Federal Reserve Board to keep interest rates low. This affects “long-tail” and interest-sensitive insurance products like LTCi and universal life insurance because an insurer’s general account fixed-income portfolio cannot generate an investment return that satisfies the assumptions used to develop the product. Also, while it appears the stock market will have meaningful gains, its volatility continues to scare many investors from allocating their savings to achieve real rates of return in excess of the rate of inflation. And the overhanging “fiscal cliff” has continued to keep investor anxiety high.

Paul Buse, Dave Evans, Madelyn Flannagan and Margarita Tapia contributed to this report.