Insurance premiums continued to increase last year with the industry still coping with the effects of the Sept. 11, 2001 terrorist attacks and the poor investment climate. Rising premiums mean higher commission fees for brokers, however.
The 15 largest insurance brokers saw a 11.2 percent increase in Los Angeles County revenues for 2002, to $597.6 million over the previous year's $537.5 million.
There was little movement on the list, with No. 9 Dodge Warren & Peters Insurance Services Inc. overtaking Willis Risk & Insurance Services of Los Angeles, due to Dodge's larger revenue increase of 26.7 percent.
No. 14 PRB Insurance & Financial Services Inc. registered the largest gain for the year. Managing Partner Leo Thomas attributed the performance to strong revenue growth in its estate, retirement and pension plans.
The insurance industry has been increasingly reliant on premiums as a means of generating income, which has driven up premium prices.
Aon Corp. remains atop the insurance brokerage list, with L.A. County revenues up 7.5 percent in 2002, to $162.5 million.
Los Angeles is headquarters for Aon's Western region, with specialty areas in entertainment, health care, technology and construction.
Managing Principal Peter Arkley attributed most of the growth to those specialty areas, which represent close to half of the overall market in the Western region.
He also cited high retention levels, with the overall office running at a 96 percent renewal rate and even higher in the specialty areas compared to industry rates of between 88 and 92 percent.
Chicago-based Aon has 990 employees in its three L.A. County offices, down from 1,123 last year. The reduction was the result of a shift of workers to the company's Orange County offices. "I anticipate growth to 1,200 people in the next couple of years (in Los Angeles)," said Arkley.
For 2003, Arkley also expects fewer sharp hikes in premiums. "In 2002, we saw increases from 30 to 500 percent (in premium prices), but we're seeing smaller increases this year," Arkley said. "Even though the financial markets aren't back, there is a bit of softening in premiums as prices have come into line."
Although premium increases have affected their smaller business clients, Arkley said Aon's larger accounts, which make up roughly 50 percent of business, are on a fee basis and thus not affected by the market.
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