Running your own insurance agency can be rewarding. In fact, as our industry evolves to meet new challenges, new markets open, and we explore new ways of working, there’s never been a more exciting time to be an independent agent. But it isn’t easy. Success is reserved for those willing to commit their effort and dedication to be the best insurance professional they can be.

The good news is you aren’t alone.

Part of finding success as an independent agent starts with considering agency networks that can provide the tools, resources and information to improve revenue and build your business. To choose a network that best suits you, you need to understand your options.

Choosing the Right Network
Aggregators. Clusters. Alliances. Aren’t they the same? Not really.

Aggregators give you access to insurance carriers’ contracts, providing market access and aggregate premium, sometimes with additional compensation.

Clusters are agents gathered under formal joint ventures or loose affiliations to place individual books of business as part of a bigger book to earn higher commissions or profit sharing. There’s usually a division of responsibilities and resources, as well as shared decision making and expenses.

Alliances go a bit further than aggregators and clusters, focusing on providing services to independent agents that will aid in growing their business and adding to profitability. Benefits can range from mentoring programs, formal trainings and webinars to assistance with succession or perpetuation plans, among others.

Before choosing which type of network is best for your business, ask yourself these key questions:

  1. Which organization will best help me reach my short- and long-term goals?
    Agencies evolve to meet client needs and changing circumstances. Making sure the network you choose has a track record of meeting evolving needs is vital. While many networks offer access to insurance companies otherwise unavailable to independent agents, having broad access to preferred, standard, E&S and specialty markets will help your agency grow over time. Along the way, training and mentoring resources will help you understand and learn about new products and markets.
  2. How are commissions paid?
    Independent agents must clearly understand how new business is placed, what name is on the policies and, most importantly, how commissions are paid. In some instances, organizations will direct the placement of accounts or use their facility as a commission pass-through. Make sure you are receiving the full benefits of any preferred commissions.
  3. Will you have the ability to hold onto clients and carriers if you change your mind?
    Make sure contracts address the beginning, middle and end of the relationship. Clarity around ownership of your clients, accounts and commissions, as well as the ability to represent your insurance companies without restriction are key details. This is important to know in case the affiliation fails. Ask how business will be transferred in the event you terminate the relationship.

Maximizing Your Benefit
Once you’ve selected the right network, make sure you maximize its benefits. These can include marketing support, access to programs and specialty markets, training and education, discounted business services, among others. The products and services provided by your selected network are there to help you achieve a greater return on investment. That ROI is the essence of being part of a successful network.