Finding the right insurance carriers for independent insurance agency can be quite the challenge. It’s often more a process of them picking you than the reverse. With rare exceptions, they won’t come knocking on your door. How easy or how hard it will be to find the right insurance carrier for your insurance agency depends on your agency’s stage of maturity. For new or young agencies, it can be a Herculean challenge. Remember shopping your resume around when you just got out of college and had little to no meaningful work experience? It’s something along those lines. For more experienced insurance agencies with an existing book, adding insurance carriers is generally a little bit easier, but can still be challenging.
Building your independent agency’s insurance carriers
Like any important business endeavor, building your insurance carrier relationships and securing appointments starts with a strategic business plan. Look at your current book of business, your community, your competition, and decide what carriers you need so that you have a well-rounded roster representing your target business segments. Where are the gaps? What’s your growth plan? Are there specialty programs you want to build or niche industries you want to target? You also need to think strategically about how many carriers you need. If you work with too many insurers, you may not be able to meet premium volume requirements or effectively manage all the relationships.
Identify and research the best insurers to meet the needs specified in your plan. In researching insurance companies, you want to look at a variety of factors such as ratings, company brand and reputation, lines of insurance they serve, specialty programs and expertise, geography, ease of doing business, support services for agents, and cultural fit.
Getting appointed to your insurance carrier wish list
It’s not simply a matter of you deciding which insurance carriers will work well for your agency and your growth plan, each carrier will consider how an agency fits into its business plan and growth strategies. And each insurer has its own defined process for appointing insurance agencies. You need to pass a due diligence process to be authorized to act as an agent on behalf of that carrier. Typically, insurance carriers will look for prospective insurance agencies to:
- Be licensed in the states where they write business
- Have a track record as an insurance agency with an existing book of business
- Have a business plan and a perpetuation plan
- Be prepared to demonstrate agency viability and profitability
- Demonstrate good client retention rates and other key metrics
- Be able to pass a criminal background check
Many insurance companies have information about how to get appointed and applications to start the process on their website, but you might want to first leverage your connections to reach out to someone within the company. Interacting with insurance company representatives and underwriters at trade shows, conferences, industry events, and social media should be an ongoing part of your agency networking. This networking should encompass both the insurance companies you currently represent and the ones that you aspire to represent. Your goal is to familiarize key carrier staff with your insurance agency and to build relationships.
Other alternatives to expand access to insurance carriers for independent agents
- Joining an insurance agency cluster, network, or aggregator. These types of membership arrangements go by many names, but the commonality is that they offer members expanded market access and increased agency compensation. Beyond that, groups vary in terms of both the way they are structured and the services that they offer to members. They range in size from a handful of regional member agencies to national networks of thousands of members. Some are loose alliances with few services, while others provide administrative, operational, marketing, and technology support. When considering joining an aggregator, kick the tires thoroughly on the compensation structure, the entry and exit requirements, and the scope of services they offer. Some groups require an entry fee, others take ownership of a portion of your book of business, and still others are paid through a cut of commissions. With good networks, this can be more than offset by increased profit sharing.
Many insurance agencies find these groups a good solution to broadening carrier access, but it is quite important to thoroughly research the historical performance of the group and to understand the legal underpinnings of the arrangement.
- Working with an insurance wholesaler. IRMI defines a wholesale broker as “a type of insurance broker who acts as an intermediary between a retail broker and an insurer, while having no contact with the insured.” A wholesale broker will have established relationships with key carriers. The larger volume that a wholesale broker places means that they will have more clout with insurers and be able to negotiate better compensation arrangements than an independent agency could yield. Wholesalers also have deep industry expertise for marketing and risk management. Because the wholesalers are invested in the success of their agencies, they will often provide an array of support and training services. Working with a wholesale broker will allow you to develop and market a specialty business that will afford a competitive edge.
NIP Specialty has the expertise, efficiency, and strengthened relationships that wholesalers can bring to the process.
Working with NIP Group. NIP Group’s Specialty Brokerage is a market leading wholesale brokerage operation serving 25 niche industries. We target non-standard commercial risks underwritten by admitted and non-admitted specialty carriers. Agents can leverage our expertise in placing and servicing complex risks through relationships with global insurance markets. Our philosophy of providing ingenuity in insurance has established us as one of the nation’s most respected specialized business insurance and risk management intermediaries, and a recognized leader of innovative insurance solutions. Our brokers and the businesses they serve are the central focus of everything we do at NIP Group. We are service fanatics to the core, seeking to exceed expectations. We are committed to a core philosophy of true partnerships at every level.
NIP Specialty has the expertise, efficiency, and strengthened relationships that wholesalers can bring to the process.
NIP Group is open to all independent agents – Click here to get appointed today
Related resources to insurance carriers for independent agents:
- Insurance Specialties: Finding the Right Niche to Propel Agency Growth
- NIP Group’s Guide to Launching a New Insurance Program
