Benefits of an Insurance Aggregator or Agency Network

February 20, 2019

A burgundy banner that has the word "Benefit" written across it.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 article 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.

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 offset the fees or commission sharing required to become part of the agency group in the first place.

Benefit 3

Access to Training and Other Resources

Often an agency network can help with a variety of different types of training to help keep your agency current and competitive. They can set you up with specialized product training through the carriers with whom they partner, including keeping you updated on current carrier appetites in your state, and new products and services. In addition, they can assist you with learning to add other lines of business to your agency, such as education on commercial quoting procedures, or specialized markets. The best part is that you’ll often have a dedicated customer service representative available for questions as they arise, so you can learn as you build your business. Some may even provide marketing and sales advice in some capacity.

Cover of Smart Choice Magazine 2019 Issue 1 titled "The Truth About Agency Networks."The Truth About Agency Networks

Have you wondered, "Why should I join an agency network and what are the benefits?" Most people would provide the answer of: “access to markets and carriers!” Although that probably is the biggest reason, the truth is that agency networks offer so much more than that. For more on networks, aggregators, and clusters — and how to pick what's right for you — check out 2019 Issue 1 of the Smart Choice® Magazine.

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