Industry Report Reveals that Brokerage Market Continues to Struggle

WFG Capital Advisors LP, a leading investment banking firm to the insurance industry, announced today that its 2004 six-month research report among the industrys leading brokers indicates that growth is continuing to slow at an alarming rate.

Harrisburg, PA (PRWEB) September 16, 2004 -- WFG Capital Advisors LP, a leading investment banking firm to the insurance industry, announced today that its 2004 six-month research report among the industrys leading brokers indicates that growth is continuing to slow at an alarming rate.

According to Steven Wevodau, Managing Principal of WFG, An assessment of the leading distributors contained in WFGs Broker Insights report as of June 2004 strongly suggests that industry leaders are continuing to experience a significant decline in organic revenue growth."

Wevodau added, The leading firms sustained only 5% organic revenue growth for the six month period ending June 30, 2004. In other words, if you remove the benefit of acquisitions and foreign currency exchange fluctuations, organic revenue growth among the industrys eight leading firms posted very modest results. The quarterly decline of organic growth throughout the past six quarters continues to be a major financial concern for most industry leaders.

This further supports that product rate stabilization continues to nag industry leaders. The direction of the market for 2004 continues to remain in question as the overall loss tallies from the recent catastrophic hurricane losses remain a catalyst on whether the reinsurance and primary markets will begin to experience rate firming. It remains highly unlikely that any significant rate movement one way or the other will be felt until reinsurance contracts are renewed for January 2005," Wevodau stated.

According to Rob Lieblein, Managing Principal of WFG, Another significant trend uncovered is that the banking market segment continues to emerge as a significant component of insurance brokerage". Lieblein added, The distribution market heavily favors financial institutions who have outpaced the traditional brokerage market during the first half of 2004 ."

Our analysis supports that the leading index of domestic banking institutions continue to grow as a combination of acquisition and organic means. Banks can leverage their lower cost of capital as a means to weather the storms of a turbulent market which makes them highly formidable opponents to the traditional channels," Lieblein added.

A complete report of the industry research is included in the September 2004 edition of Broker Insights, which includes a 2004 analysis of the worlds leading brokers and insurance product distributors, and is scheduled for release to the general market on September 30. The report can be obtained at the WFG web site, www.wfgca.com, by selecting the Publications" tab, or by calling WFG at 717.780.7800.

About WFG Capital Advisors:
WFG Capital Advisors, based in Harrisburg, Pennsylvania, is a leading investment banking and financial advisory firm for the insurance industry.
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