By: Michael Miller, Smart Choice® State Director
Whether you’re just starting your own agency or expanding into a new market, buying power will determine the insurance carriers who will work with you. Joining a cluster group is an easy way to get appointments with the industry’s top carriers.
It’s Tough Going It Alone
Whether you’re newly independent or a seasoned insurance agent, you’ve got a lot of work to do. When your efforts are stretched between marketing, making quotes, signing new clients, and managing your staff, pursuing new carrier appointments can seem impossible.
As a small agency, it’s difficult to get your foot in the door with the nation’s top carriers or meet the profit sharing minimums many carriers require. Savvy agents know they have more buying power when they join forces with other independent agents. That’s why many agents join cluster groups.
Power in Numbers
Cluster groups are able to pool the buying power of their members to make their insurance agents look more desirable to carriers. Instead of looking at the performance of one independent agent, carriers look at the performance of the entire group. Often, cluster groups already have relationships with the industry’s top carriers, so becoming a member can get you nearly immediate access to appointments.
Getting Paid
Joining a cluster group also gives you the power to bargain for better commissions. Commissions vary across markets and carriers, but generally, a cluster group will help you negotiate higher commissions.
Cluster group members also take advantage of a larger share of profit sharing. When you join a cluster group, profit sharing increases because your share is based on the performance of the group, not your individual agency.
Sources:
https://www.agencyequity.com/