Insurance Cluster Groups and Aggregators: What to Consider Before Joining

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You’ve likely heard about insurance aggregators. Perhaps friends and colleagues have shared their unique experiences about being part of one. 

Perhaps in the past you’ve thought an aggregator wasn’t a fit for you. “I’m too big for a group like that” or “I have too many markets.” Maybe you just thought that aggregators were only for struggling agencies who “couldn’t make it on their own.”

No matter the reason, now is the time to reevaluate.

Agency groups have evolved significantly over the last 10 years. What once was a solution tailored to small or mid sized agencies struggling to survive is now a proven, valuable growth asset for agencies of all sizes.

Still, deciding whether an aggregator is right for you may feel overwhelming. 

We’ve put together a list of questions to help you evaluate the opportunities and benefits that joining an aggregator may present, so you can decide if it’s the right decision for your agency, your needs, and your vision.

Would it be helpful to have access to new markets or relieve pressure to satisfy your existing ones?

If you’ve ever lost a current customer or prospect opportunity because you didn’t have the right market for them, then it’s worth considering joining an agency group.  Becoming a member of an agency group helps you to gain access to new markets, allowing you to increase your close ratio and retention which will lead to agency premium growth.  

As an added bonus, if you’ve ever struggled to meet minimums or give enough new business to all of your carriers, joining an aggregator can help to remove those pressures.

By increasing your market access, you will increase your range of choice for your customers; this is a key factor in why someone chooses an independent agency. With this expanded access, you can increase your close ratio as well as retention, creating premium growth opportunities. Agencies that join Renaissance Alliance, for example, have access to 45+ standard markets. 

Insurance Agency Market Access

 

Can you measure business growth and uncover new opportunities within your current book of business?

Many agencies struggle to make time to do deep analysis on their business data, and others don’t have the resources to carefully track and optimize it. You’re an agent, not a data analyst, but most management systems don’t surface the growth opportunities that are hidden in your book of business.  

The good news is that some aggregators can offer assistance on this front. For example, Renaissance Alliance offers added services and technology, such as providing key performance indicators that allow you to continue to monitor and measure your growth. 

If you’d like to get a better handle on your data and more easily find hidden opportunities in your agency management system, a group like ours may be a good fit for you. 

Do you need a more extensive support system?  

Another benefit of joining an agency group is access to additional support and community.  What that looks like can widely vary from aggregator to aggregator. As you explore different agency groups that serve your area, make sure you’re clear about the level of support you will (or won’t) be receiving.

At Renaissance Alliance we have over 80 full-time insurance professionals who are ready and willing to help and advise you. We offer additional support for our members too; from account placement and back-office processing, to employee training, marketing support, a help desk, and more. 

 

Are you looking for ways to increase your profit sharing and create stable recurring compensation

Joining an agency group can also help you create more predictable and stable income. Being a Renaissance Alliance member, not only will you help increase your profit sharing, but you will also have access to carrier overrides. 

Renaissance Alliance has negotiated carrier overrides with nearly half of our carrier partners, and we share a portion of that revenue with member agencies.  With these fixed overrides, you are guaranteed enhanced compensation on all new and renewal business with these carriers.  Combined, these types of benefits can create added peace of mind and help stabilize your income. 

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Do you want to compete against larger agencies?

There’s been an increase in the number of mergers and acquisitions in the independent agency world. With more and more agencies selling to larger groups or national brokers, it can be difficult to compete as an independent agency.

If you don’t want to sell, but still want the benefits of a larger organization, joining an aggregator may make sense for you.  

Many agency groups require you to surrender your book of business or sign over ownership to join, so be sure to evaluate terms carefully. Others have contracts that contain steep termination fees and penalties.

Look for an agency group, like Renaissance Alliance, that has no entry fee, no exit fee, and allows you to retain exclusive ownership of both your agency and book of business. 

Is your staff at maximum capacity? 

If your staff is stretched too thin and you’re not yet ready to make more hires, then an insurance aggregator may be able help. Some agency groups offer services and systems that work seamlessly within your agency, helping to take tasks off your team’s plate. 

When joining an organization like Renaissance Alliance, you gain access to ongoing support that allows you to outsource repetitive, tedious or transactional activities, giving you and your team time to focus on your customers and your growth

Are you growing as fast as you’d like to be? 

While most agency groups typically provide increased market access and enhanced profit sharing, look carefully at the unique benefits that are included with your membership.  

One of the key benefits of an aggregator like Renaissance Alliance is having a partner in growth. At Renaissance Alliance, you can help grow not only your premium and revenue, but your agency value as well. Renaissance members grow on average 2-4 times the average agency, and Renaissance top quartile members grow an average of 13% per year. With our assigned growth partners and our proprietary tools and services, we’ll help you identify and implement tailored plans to reach your agency goals.  

Making the right decision for you

Ultimately, no one can tell you whether an agency group is right for you and your agency.

Only you will know whether the benefits of any one aggregator will help your agency, and what types of services and support best match your unique needs.

No doubt, it can be a tough choice, but we hope that asking these questions will make that decision a bit easier for you.  

We’d love to explore whether we may be a good fit for you.  Reach out to learn more about how you can achieve growth with Renaissance Alliance.

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About Renaissance Alliance

Renaissance Alliance works with independent property casualty agency owners to grow your premium, maximize your revenue and increase the value of your agency through increased profit sharing, guaranteed override revenue and offloading non-revenue generating activities. The net effect is higher revenue, decreased expenses, improved operational efficiency, and accelerated agency growth.

 

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