Part 4, Fees: Should I Join An Insurance Aggregator or Agency Network?

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.

Drawback #1: Membership fees
Agency networks exist because there are many insurance agents who need access to markets for their customers. The networks provide a service, and have to be compensated in some way to make money and stay in business. Therefore, they charge fees to the agency owner in exchange for access to markets. For an agency owner who’s just starting out in the industry and needs markets, but has little profit and cash-flow, this can be a problem. Agency networks typically charge fees in one of three ways: Monthly membership fees, initial start-up fees, or commission splits.

Some agency networks charge agency owners fees in MORE than one way, requiring a start-up fee, a monthly fee, AND a commission split on business written through their program. While others only charge a commission split. The commission split charge in some networks is taken on income earned through the carriers the agent accesses through the group, and/or on the commissions agents earn on the carriers with whom they have a direct appointment.The agency owner must investigate the contract of each agency network, and decide which network offers them the best markets for the littlest cost.

You Don’t Have to Use Our A+ Insurance Carriers, but Why Wouldn’t You?

Report card on a desk
Report card on a desk

You Don’t Have to Use Our A+ Insurance Carriers, but Why Wouldn’t You?
By: Michael Miller, Smart Choice® State Director

As an insurance agent, you know that not all insurance carriers are created equal. The experience your clients have as policyholders and you have as an agent can vary significantly between companies. That’s why it pays to be choosy when pursuing appointments with insurance carriers.

Excellent Carriers for Policyholders

The experience policyholders have with your carriers can be a significant factor in whether or not they renew with you. To satisfy your policyholders, your carriers should have a reputation for excellent customer service and offer competitive rates.

Here are JD Power’s rankings of the nation’s top carriers based on a consumer survey:

Where do your current carriers rank? Are they carriers of excellence or just barely making the grade? Many of Smart Choice®’s top-rated carriers perform well on the JD Power surveys.

Excellent Carriers for Insurance Agents

When you’re deciding what appointments to pursue, you also need to consider whether or not the carrier is a good fit for you professionally. Does the commission rate and other compensation make it worth writing the policies? Will carrier representatives respond to your needs efficiently and effectively? Does the carrier have the resources to write the policies your clients demand?