Strong Revenue Gains for Selected Food Service Firms Signal Premium Audit Potential for Insurers

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For certain sectors of the US hospitality industry, strong sales growth experienced between 1999 and 2003 offers insurance companies writing these business classes an opportunity for enhanced premium audit income, according to information released by MarketStance

For certain sectors of the US hospitality industry, strong sales growth experienced between 1999 and 2003 offers insurance companies writing these business classes an opportunity for enhanced premium audit income, according to information released by MarketStance.

MarketStance, the business information, insurance statistics and analytical services firm that specializes in the US insurance industry, reports that nationally stronger-than-average sales growth during the four years ending 2003 was experienced by ice cream, soft serve and frozen yogurt shops, along with bagel and coffee shops. The selected business classes experienced double-digit sales growth, ranging from 11% to 14%, while the number of new firms grew only modestly. Such business trends suggest that insurers underwriting these firms may find value in adjusting their premium audit activities and renewal/exposure estimates accordingly.

Caterers and Casino Hotels also experienced strong sales growth of between 6% and 14% during the 1999 to 2003 period. Growth in the number of such accounts was also strong, at 5% and 7% respectively, signaling new business opportunities in these sectors of the hospitality industry.

Sales forecasts for these business categories reveal slowing, but continued strong revenue gains. The highlighted food service firms are expected to see growth in line with the projected industry average rate of nearly 8%. Casino hotels are expected to experience sales growth of 7%.

At the state level, in the fast-growing state of Nevada the highlighted business categories show even stronger historical and forecast growth. Caterers and ice cream, soft serve, frozen yogurt shops, as well as coffee and bagel shops in that state are generally expected to sustain revenue gains in the double-digits. Growth in the number of catering operations in the state, which showed solid gains between 1999 and 2003, is expected to slow significantly through 2007 even as sales gains of some 10% are forecast.

Surprisingly, strong growth has also been experienced in Mississippi. Historical sales growth for caterers and yogurt shops has exceeded 30%, while ice cream, bagel and coffee shops have recorded growth of between 15 and 18%. Forecasts are for strong double-digit revenue gains through 2007.

MarketStance integrates business demographic and insurance statistical information to provide market trend, exposure and profitability measures on more than 24 million U.S. businesses of all sizes to support market and operational planning and execution in the insurance industry.

About MarketStance

MarketStance is a registered trademark of IntelliStance, LLC, located in Middletown, Connecticut. MarketStance integrates economic and business demographic data with insurance statistics to provide an up-to-date resource for firms operating in the insurance market. The company additionally provides a highly skilled statistical and analytical consulting resource that is enhanced by an understanding and experience in insurance.

Contact:

MarketStance    

Jeanne Hotchkiss                

213 Court Street, 6th Floor                

Middletown, CT 06457                

860-704-6391

888-777-2587                        

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Jeanne Hotchkiss
MarketStance
860-704-6391
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