A recent study commissioned by the Massachusetts Association of Insurance Agents (MAIA) showed that independent insurance agencies contributed over $1 billion to the state economy last year, in payroll, employee benefits, taxes, rent, and charitable giving.
The study, conducted earlier this year by Towers Watson, surveyed 212 member agencies comprising 15 percent of MAIA’s membership, of various sizes and writing different mixes of personal and commercial line business. Towers Watson then extrapolated the survey results for all MAIA member agencies to reach the conclusions produced by this study.
The breakdown is as follows:
Payroll – $747,376,406
Employee Benefits – $100,036,791
Rent – $55,868,648
Taxes – $76,486,101
Other Expenditures – $87,202,688
Charitable Contribution – $9,663,649
In a statement, the association elaborated that the tax amount reflected property and real estate taxes, unemployment taxes, and state income taxes. Federal income taxes and social security taxes were excluded from the study. The MAIA went to state that approximately 80 percent of MAIA members rent, rather than own, property for at least one agency location, and that other expenditures included things like technology, office furnishings, supplies, advertising, legal and accounting services, and remodeling and construction.
There are approximately 200 property/casualty agencies in Massachusetts that are not members of MAIA. Based on those agencies’ locations, Towers Watson estimated those non-member agencies produce an additional financial contribution of at least $46.1 million. Combined with the MAIA member estimate, this means a total financial contribution of approximately $1.123 billion to the state economy.
"MAIA is extremely proud of the role its member agencies play in both the economy and the insurance marketplace of the state," Francis A. Mancini, Esq., MAIA president and CEO said in a statement. "The most recent death knell for independent agencies came with the introduction of auto insurance competitive rating. But after five years and the arrival of GEICO, Progressive and Allstate, with their websites, 800 numbers and few jobs, independent insurance agencies remain the market leader in the state in all lines of insurance. Independent insurance agencies are "survivors" in an economy and marketplace that acknowledges and appreciates those who are a vital part of the communities where they operate."
