Many independent insurance agents, both new to the industry and established agents, at some point find themselves asking the question: “Should I join an aggregator or agency network?” Independent agents aren’t tied down by the restrictive contracts and obligations that captive agents are – but they face their own set of challenges as an independent business owner. This ongoing blog series investigates both benefits and drawbacks of agency groups.
Benefit #2: Higher Commissions
Another great benefit of an agency group is that they’ll likely be able to offer you better commissions with the carriers you access through them. Why? Because they’ve negotiated higher percentages paid out by their affiliated carriers on both new business and renewal business. Basically you have the benefit of being part of a large group which means you’ll have access to commission rates that are typically only given to larger, more established agencies. An additional commission point or two can make a big difference! This benefit can help off-set the fees or commission sharing required to become part of the agency group in the first place.
Many independent insurance agents, both new to the industry and established agents, at some point find themselves asking the question: “Should I join an aggregator or agency network?” Independent agents aren’t tied down by the restrictive contracts and obligations that captive agents are – but they face their own set of challenges as an independent business owner. This blog series will investigate the different types of groups that exist in the insurance marketplace, as well as the benefits and drawbacks of aggregators and agency networks.
Benefit #1: Access to markets and carriers
Perhaps the most obvious advantage, and the reason a majority of independent agents seek out these types of groups, is access to markets. What does that mean? It means independent agents don’t automatically have a carrier or insurance company they represent. They have to actively seek out contracts with multiple insurance carriers in order to offer their clients insurance coverage. The advantage for independent agents is that by representing multiple carriers, they can offer their clients more options, including TYPE of coverage plans, AND at the best price. Unfortunately, it’s extremely difficult to get markets when an agent first starts out in the business because they have no history with the carriers in the industry. They have to gain the trust of the carriers first. Agency networks and aggregators can help the agent achieve this by establishing a relationship with the carrier first. This means that the agency network is directly contracted with the carriers themselves, and then – with their pre-established relationship – helps agents they’ve vetted and contracted with themselves, become appointed to write business with those carriers.
Stay tuned for more in our blog series!