Robert Wells, Territory Manager
In a constantly evolving and extremely competitive marketplace, many independent agency owners are looking for ways to streamline the effectiveness of their agency operations and to increase income. We also see a rising interest in exclusive agents looking for a secure way to break into the independent market. The amount of information readily available can seem overwhelming when trying to understand the various options and how they can benefit your success.
Terminology also varies greatly when discussing the options available to the independent agent. Brokers, Groups, Clusters, Aggregators, Networks, and many other terms are all over the marketing emails clogging up your inbox, and each has its own business model which goes from conservative to downright farfetched in some cases. The purpose of this article is not to deep dive into the differences of each, but to point out the overall purpose of having an “Agency Partnership” in the first place.
No doubt you have already experienced how carriers are now reducing new and renewal commissions, reducing profit-sharing dollars, increasing production requirements, increasing requirements for direct company appointments, tightening allowable loss ratios, increasing retention and growth percentages, and making life harder on the independent agency overall. This is where an agency partnership can truly make a difference to your daily operation.
According to recent articles by leading insurance publications, over one-third of all independent agencies currently belong to some sort of agency partnership group, and those numbers are growing rapidly due to the challenges they face around every turn. Of those agencies that are a part of some group, 88% say they are “highly unlikely to leave” their group due to the successful partnership benefits they are experiencing.
Some of the most beneficial aspects of joining a group may include: reduced production requirements, increased new and renewal commission, higher allowable loss ratios for profit sharing, increased profit-sharing dollars, access to new and various markets and companies, sales training and support, marketing assistance, group discounts on technology services and products, assistance with mergers and acquisitions, perpetuation planning and mentoring and consulting services.
Existing Agency Case Study
Large agency discovered how much extra revenue they could be making using our combined volume.
When we approached this agency they were extremely skeptical of the claims we made regarding increased revenue on their existing books of business. After due diligence on both sides, decided to partner with them and have had nothing but success. Their revenue has increased by almost 5% solely based on special deals with our partner carriers. After insisting that they had all of the company contracts they needed, they still took advantage of several new appointments arranged by our team and continue to grow organically with those new carriers.
Startup Agency Case Study
Producer for a captive agency decides to start own agency.
After several years of success as a producer, started their own agency utilizing a “Foundation Program” which is designed just for new agencies. With our team working closely with the agency on setup, training, and coaching, they were able to secure multiple agency appointments in a short period of time. Agency produced almost $1M in written premium in the first 12 months of business while earning substantial amounts of profit sharing and overrides on business written.
These are just two in a large number of success stories or our organization, which is duplicated across the country on a daily basis. (“Your mileage may vary” based upon the specifics of which network you choose and how their specific agreement applies to your situation and agency structure.) Careful study of the various groups and agreements is highly recommended as not all agency partnership groups are alike.
As the insurance industry continues to evolve, many agencies are deciding that there truly is power in numbers. The largest agency partnership group today has over $10B in combined written premium (SIAA). These groups use this premium volume in order to negotiate on behalf of the members for the increased revenue, appointments, discounts, and services. In an upcoming article, we will discuss some of the important questions to ask when considering an agency partnership program.