The report, "The 2003 Property-Casualty Insurance Market," showed that the overall p-c market stood at $434.7 billion in direct written premiums, growing by 9.5 percent, or $41.29 billion, in 2003 over 2002. Independent agents and brokers wrote $258 billion, or 59 percent, of this market.

The report by A.M. Best Company of Oldwick, N.J., found independent producers' market share exhibited continued growth in both commercial and personal lines but increased by less than one percent.

"The results of this report clearly show there is a strong and growing consumer and business acceptance of the independent agency and brokerage consumer model," said Robert A. Rusbuldt, IIABA chief executive officer, adding it shows real opportunities for growth.

However, John Wepler, executive vice president with the consulting and agency valuation firm Marsh-Berry, based in Concord, Ohio, said much of that growth can be attributed to the transformation of the independent agency sector from a sleepy backwater to a dynamic, sales-growth-driven enterprise.

"The average agency today is larger than a number of years ago," Mr. Wepler pointed out. "The by-product of this is that it is run more like a business with business discipline. They run far better than they have in the past and continue to improve."

The improved discipline, said Mr. Wepler, has led to improved values for agencies, helped by an excess of buyers and the hard market. However, he warned, there are challenges ahead as the market softens.

"The good news is that agency values are improving; there is wind in the sails," he observed. "But if they can't figure out how to write new business in the soft market, it could affect growth."

"I wouldn't lean back or exhale just yet," he advised agents.

In the report, the commercial lines market continued to grow at a double-digit rate of 12 percent in 2003 to more than $229 billion. The more than $24 billion in commercial lines written premium growth followed a strong year of growth in 2002, when producers market share increased by 19 percent.

As a percentage of the overall market, agents still corner the commercial market with more than 79 percent of the business, up just slightly from 2002. Captives saw their share drop slightly to independent agents by less than 20 percent. Direct writers, the report said, kept their less-than-one percent share.

The personal lines market grew 9 percent in 2003 to $206 billion, following 11 percent growth in 2002. Independent agents and brokers added close to $7 billion in premium in 2003, building upon the $6.7 billion in personal lines premiums they added in 2002.

Independent agents' share of the personal lines market grew slightly by .31 percentage points. But captives still retained the lion's share of the market with more than 54 percent. Independent agents hold more than 36 percent. Direct writers gained slightly over 2002, garnering a .35 percentage point increase, holding onto slightly more than 8 percent of the market.

On both the commercial and personal lines side, regional agency insurers increased their share of business while national agency companies lost ground, dropping less than two percentage points off of their commercial share and less than one percentage point off personal lines.

A complete copy of the report is available to IIABA members and subscribers of the Big "I" Virtual University at www.independentagent.com.