Insurance clusters for new agents can give you a better way to start your new independent agency off on the right foot. When you leave the Liberty Mutual independent agents, you lose a lot of support that you’re used to having as an agency owner. Even though you’re an experienced agent, you’re still out there fully on your own. So, how can you get the best possible head start to grow your book of business? By determining whether you should join an insurance cluster.
In this article, you’ll learn about:
We know you’ll learn a lot about whether you should join a cluster. To help you decide, we’ve created a free workbook for you to download. You can grab your copy here.
Insurance clusters are also known as network aggregators or insurance alliances. They are formal alliances of independent agencies that work together to provide the members with support and various benefits. These insurance clusters accept new agents and experienced agents. SIAA is an example of an insurance cluster that accepts new agents that provides multiple benefits for its members.
Experienced agents who are involved in an insurance aggregator know one thing: there’s strength in numbers. When you were part of Liberty Mutual’s independent agents program, you relied on their program for help. Liberty Mutual is a big insurance company. Now that you’re truly independent, you’re on your own. It's difficult to get appointments from insurance carriers. It isn’t always easy to grow your book of business alone. There are several benefits of joining the right insurance cluster.
As a new independent insurance agent, you’re gaining access to more insurance carriers, which expands your ability to provide clients with more insurance products. Offering more products to your clients means that you have the potential to improve your profits as well as grow your book of business. Happy clients refer to friends and family!
The right insurance cluster helps insurance agencies like yours negotiate software licensing fees for necessary technology, such as for your agency management systems, customer service needs, and other expenses. Because your independent agency is now part of a larger group, it’s easier to negotiate prices as a group and lower the prices for all the members.
Clusters give you access to other agency owners and independent insurance agents. We’re talking about mentors, friends, and advice! So, if you’re looking for information about how to improve how your agency operates, you can find someone to talk with. If you’re looking for the opportunity to buy, sell, or merge your independent agency, you can get the right advice at the right time… and you might just meet the right agency owner within the insurance cluster!
You join in on profit sharing. Some insurance aggregators, such as SIAA, provide agency owners with profit sharing abilities.
When you’re a new agent, the first thing to consider is whether the insurance cluster is a right fit for you. Can you or do you get along with the other independent insurance agents within the cluster? Personality is a big deal. If you don’t like the other agents in the insurance cluster, you’re not likely to get or remain involved.
If an insurance carrier has a problem with the insurance cluster you’ve joined, the appointment could be lost. So, be careful when you’re doing your research into which insurance clusters you’re considering. Are those clusters you’re interested in staying out of trouble in the industry? Are they gaining access to the right carriers?
Read the contract from the cluster. What sort of fees are there? Can you live with those fees? Some fees that might be present include:
Maybe you decide those fees are worth it and maybe you decide they aren’t.
Some insurance clusters have a production requirement. It’s important as an agency owner that you thoroughly read the contract so that you know what’s expected of you as a member. If there’s a production requirement, you would need to fulfill that requirement along with any requirements you already have with your insurance carriers.
You’ve learned about the benefits of joining insurance clusters for new agents and the disadvantages. While those are important, you should also get answers to some important questions. There are questions you need to ask yourself to determine what’s really important to you. There are also questions that the insurance cluster should be able to answer for you as well. The answers they have for you will help you decide whether or not to join.
Before you join a cluster, ask yourself the following questions and answer them honestly to decide if the insurance clusters you’re interested in are right for you.
Before you sign the insurance cluster agreement that makes you a member, read the agreement carefully and get answers to questions you have. Hopefully, the following questions are a good starting point.
Remember, the questions above are a great place to start. Review the websites of the insurance clusters you’re interested in joining. Make a list of questions that you want answered. Get the answers before you join. You don’t want any surprises after you join.
We hope you’ve taken a lot of great information from this article. Insurance clusters for new agents can definitely be a better way to get a head start for your new independent agency. But when you’re looking to join an insurance cluster, it’s imperative to choose the one that’s best for your agency. To help you along the way, we’ve prepared a free workbook to help you make this decision. Get your copy here!