Veterinary services provide an interesting target for independent agents
Veterinary services represent a strong and growing market that is dominated by small and medium-sized establishments, making it a perfect target for independent agents. Premium growth in this niche market has averaged 6.8% a year, while the industry has enjoyed a 2.6% real annual growth. Loss ratios are satisfactory, resting at a 70% average for the United States overall. This niche market provides nearly $134 million in premium in the United States. Veterinary services employ more than 129,000 people in nearly 19,300 establishments across the country, according to data compiled by IMR (Insurance Market Research) Corp. of Morris Plains, New Jersey.
“Nearly all the premium is in small and medium-sized accounts, making it a target for independent agents who tend to dominate this segment of the commercial lines market,” according to Katherine Grieder, IMR vice president. “The strong and continuing growth in this area and the fact that there are a large number of establishments throughout the country make this a niche that could help supplement revenue growth.
“Our data show that more than 99% of the premiums written in this market are small and medium-sized accounts, those employing fewer than 100 people,” continues Grieder.
IMR data show there are nearly 18,500 small (1-24 employees) veterinary service establishments in the United States, providing $108.7 million in premium for an average of about $5,900 per account. The 823 medium-sized (25-99 employees) vets provide nearly $24.3 million in premium for an average of just under $29,600 per account. There are only three vets with 100-499 employees in the United States, providing $813,600 in premium for an average of more than $271,000 per account.
Workers compensation dominates this market, representing two-thirds of the total premiums (67.0%). It is followed by liability, including a significant amount of professional liability (23.9%), commercial property (5.3%), and commercial auto (3.7%).
Veterinary service establishments provide nearly $23.8 million in premium in the Rough Notes Southeast region. The loss ratio is 69.7%. There are 4,600 veterinary service establishments in the Southeast–almost 4,400 are small-sized firms providing $19.5 million in premium for an average of nearly $4,450 per account; and 215 medium-sized establishments provide $4.3 million for an average of $19,800.
Information on this niche market is available from IMR at 39 E. Hanover Ave., Morris Plains, NJ 07950, or call (201) 898-4706.
Copyright Rough Notes Co., Inc. Apr 1995
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