Agencies, Brokerages Top PPP Recipients
Insurance agencies and brokerages were the largest single category of named loan recipients in the Paycheck Protection Program (PPP). Government figures reported by AM Best News showed that in that category, 3,093 participants received loans totaling $1.08 billion.
“My sense is that the majority of these PPP recipients were smaller agents and brokers, including independent agents and brokers as well as captive/exclusive agents who are essentially independent contractors selling the products of a single insurer,” said Robert P. Hartwig, director of the Center for Risk and Uncertainty Management at the Darla Moore School of Business, University of South Carolina. “They are thus small businesses, precisely the category of business for which the PPP was designed.”
“There’s no question that new business slowed for most agents and brokers in the U.S. and cash flow would have suffered,” Hartwig said.
Across the country, 6,644 named insurance entities received loans that ranged from $150,000 to $10 million each that were meant to stabilize the U.S. economy during the coronavirus outbreak. The loan program was part of H.R. 748 — also called the CARES Act — which Congress approved earlier this year. Businesses that have received Paycheck Protection Program (PPP) loans can apply for loan forgiveness if they abide by certain rules.