Why do agencies need more than carrier access?

So, you have decided to take your noble career as an insurance professional to the next level and open your own independent agency-congratulations! Or maybe you have been at this game for quite some time, and you have hit a plateau. Either way, we have been in your shoes…thinking maybe you need more market access due to the competition as of late.

We are in 100% agreeance that carrier access is one of the most critical aspects of your agency. Without having markets to place business, you have naught. Just that alone would give anyone pause to understand why agencies align themselves with an aggregator, agency partnership, or cluster group (All of which are NOT created equal). Most boast of their carrier lineup and access but as we are about to discover, owning a successful agency is more than just adding names to a roster.

While not having markets would prevent you from placing any business, too many mouths to feed or having one carrier too heavily weighted over others in your book can also impact you negatively. The difficulty of this balance quite often catches new agency owners and veterans alike by surprise. Statistics show that an agency typically will only utilize 3 to 5 preferred carriers in their agency (Not counting broker/wholesalers or specialty markets). Carrier access should be a strategy that you, as the agency owner, need to have full awareness and control over.

Let’s discuss the strategy beyond carrier access and the importance of defining a business plan and hiring and developing the right team to increase the value of your agency.  


The Plan:

It's imperative to start with a defined business plan, the road map to where you are trying to grow. This road map should always be easily accessible, referenced regularly, and updated as the market evolves.   

The majority of your business plan should be focused on your marketing and sales strategy (Carriers want to know how you will "feed" them).  

After building the foundation of your brand, it is easier to develop a marketing strategy and identify key initiatives to Build Brand Awareness. The rule of thumb is to have 5 to 7 marketing arms working simultaneously in your agency. Some examples of these include:

  • Engaging Website 
  • Consistent social media strategy
  • Target marketing through a CRM or proven contact system- i.e., drip campaigns, retention campaigns, postcard campaigns, etc.
  • Centers of Influence (COI's)- i.e., Mortgage Brokers, Financial Planners, High-End Dealerships, etc.
  • Network groups- i.e., BNI, Chamber of Commerce, etc.
  • Print ads in local publishing

As these marketing arms are running simultaneously, you must track your ROI so you can adjust as needed within your marketing plan.


The People: 

Having the right people in your business is a significant component of success. A common challenge for agencies is finding and retaining talent.

Hire- The hiring process is no easy feat, especially these days. Talent pools seem limited, and competition is stiff. This is also not something done frequently, so most small agencies do not have a formal process. So, where do we start?

  • Search: There are several avenues one can take when looking for talent. Each one of these options carries a different level of involvement and money.  
    • Direct Advertising- placing openings on social media, industry publications, career sites, or job boards. This option can help develop employer branding but is an involved process that takes time. 
    • Host site- posting on third-party sites like Indeed.com or ZipRecruiter. This method can help get you many candidates for the position, but they are not always qualified. 
    • Recruitment Agencies- Agencies can manage the entire life cycle of the hiring process. This strategy includes little time but has a high cost. 
  • Interview: Once submissions are narrowed down, the interview process starts to include an assessment/test for compatibility with the position. 
    • PeopleSense Consulting offers assessments (SIAA members receive a discounted rate) and reviews the results to understand better why or why not the candidate is a fit for the position.  
  • Offer- After narrowing down candidates and selecting the individual believed to be the right fit, it is time to make an offer. Keep in mind the competitive marketplace; know what your competitors are offering, determine the candidates' expectations and marry with your budget. Some carriers even provide producer loans to help agencies acquire top talent, so know what assistance is available to you based on your relationships.

Onboard- Another challenge for many agencies is training new staff to be prepared for the position they are filling because, again, it is not something typically done frequently; most agency owners that would be responsible for the onboarding of new staff already have full plates of managing and still producing within the agency. Several carriers offer thorough producer and customer service development programs like Hartford, Travelers, Safeco/Liberty Mutual, and State Auto to assist in this process. SIAA also provides training and development programs for staff through their online university to alleviate most of that burden from the agency.  Again, know what assistance and resources are available to you based on your relationships.

Retain- Bringing staff onboard is an investment, so it's essential to make sure that once they are on, they stay. Top of everyone's mind to incentivize employees to stay is compensation. We encourage you to read our previous blog regarding compensation and keeping sales staff motivated. What continues to keep the team happy and onboard is a solid, positive agency culture. Providing an environment for growth and development and team building to foster trust and support is paramount to the success of your staff and the agency.


The Development:

Continued training and development are vital to the continued growth and success of any agency.   With the market constantly evolving and client's preferences and needs changing, it's essential to continue investing in the growth and development of staff to make sure they are equipped for continued success. Development is achieved through mentors, programs, or other various training opportunities. This is one area where your partnerships make the most significant difference. Make sure you are receiving these opportunities throughout the different facets of your business as needs change along the agency journey.  

If the aggregator or cluster group does not provide agency development and support to this level to help grow with carriers, is it worth sharing your commission just for "access"?


The Goal:

The goal of any agency is perpetuation, whether that be to a family member, close friend, employee, or another agency. We are all looking to build something of value to be passed on. Which brings us to the number one question you should always ask yourself when deciding on your agency: How will this increase the value of my agency long term?

Contingency income can help in increasing the value of your agency if you can show consistency. When looking at possibly joining a group, it is vital to understand how their compensation is structured and the consistency with which they have earned additional compensation shared with member agencies. Unfortunately, profit sharing is never guaranteed, so search for options to earn fixed value-based compensation to increase your agency valuation.

Minimizing expenses is another way to increase the value of your agency. Is the partnership offering discounted rates and additional services for systems and platforms needed to manage your agency like websites, management systems, CRMs, etc.? Be sure the agency operates at maximum efficiency by utilizing these platforms and services at the best price. When ready to make that transition or sell, be sure to have a partner lender like Crestmark Bank to help with financial aid to make a smooth transaction and transition.


We understand that the surface has only been scratched here, and we posed many questions. If we were to venture down every avenue, this would be a book and not a blog. So, we hope that this is thought-provoking since it is not all-encompassing. The good news is you can do it! The great news is you do not have to go it alone! The right agency partnership can not only guide you through the carrier access game, but they can also act as a consultant as you grow and mirror your progress back at you to see if it's still in alignment with your goals and dreams.

We will leave you with one more question, and we've all heard this a time or two in sales. How do you eat an elephant? One bite at a time. It is impossible to do it all in one fail swoop. It takes time, and there are steps to get there. Consistency and persistence with a plan, and you win!

Category: Agent Success