Changing the Revenue Equation in Agency Networks

Oliver Travieso, Vice President of Commercial Lines, Smart Choice

From the Front Line

The New Equation: Smart Choice + Commercial Insurance = More Agency Revenue

Agency Networks have historically been viewed as a great way to access markets, which is certainly a value proposition of most networks, aggregators, and cluster groups. However, the typical costs of participation make the financial equation puzzling. From fees to join to compensation splits, the price of admission alone can be disadvantageous. Yes, you have access to markets, but do the costs outweigh the benefits?  Did you know that an agency can actually make MORE money because they are member of a network? How could this be? After all, the network has to be profitable to exist.

How can Smart Choice flip the script and make the network equation favorable to our agents?

As a Smart Choice agent, you already know it’s free to join and you can leave at any time. You also know we offer a path to Leadership status that activates exclusive benefits including 100% carrier commission for our core programs, contingency opportunities at lower thresholds than directly-placed books, bonus commissions, and other benefits.  Let’s look at how Smart Choice is changing the revenue equation, especially in Commercial Lines.

Our Commercial team has negotiated some of the strongest compensation deals in the marketplace, giving our member agents an advantage on modest to larger sized books of business. In many cases, carriers require their own equation of Very Large Book + Profit + Growth = Contingent Compensation for the agency. Smart Choice has dramatically grown our agency membership (adding over 1,000 agents annually) and our Commercial Lines portfolio in the last few years, allowing us to leverage that explosive growth coupled with consistent profitability to gain additional points from carrier partners, in some cases on a guaranteed basis. Our agents then participate in these exclusive deals at much higher factors than they typically can get directly.

Aggregate your book and access exclusive carrier deals

Aggregation can be a great way to grow your revenue with the business you already have, be it Personal or Commercial Lines. For most of our markets, you can aggregate the book under Smart Choice to take advantage of our exclusive carrier deals. Books can be aggregated via code rolls to help the agent achieve Leadership status, or through true aggregation to simply participate in our benefits while receiving 100% commission you were getting direct. Either way, aggregated books can be taken back at any time without penalty. There are some basic qualifiers to aggregate your book of business, so please consult with your local Territory Manager or State Director about the rules and perform calculations on your potentially qualifying Commercial books. Guaranteed points are always a great way to budget for your agency’s expenses and add revenue that you may not have qualified for in the past, and aggregating your book will then trigger and pass along any new business incentives that are exclusive to our network. 

At Smart Choice, the revenue equation favors our member agents!