LOGIN
MEMBER LOGIN
Calculate Your Growth Potential

4 Revenue Streams Every Independent Insurance Agency Needs

image showing 4 towers to represent 4 types of insurance agency revenue

Is your insurance agency still relying on standard commissions and volatile profit sharing for revenue? 

Every independent insurance agency needs to tap into as many revenue streams as possible in order to maximize profitability and grow.  Commissions and profit sharing are not the only way for agents to get paid, and will not maximize your potential earnings.

But what else is there, and how do you unlock those extra revenue streams for your agency?

Below, we’ll review the four essential revenue streams every insurance agency needs. Before we dive in head first, let’s take a look at some of the reasons it’s important to diversify income streams.

The Benefits of Multiple Revenue Streams

The truth is, if you’re only earning from commissions and profit sharing, you’re leaving money on the table.

As you know, profit sharing is volatile and not something you can consistently budget for or count on every year. Unlocking multiple revenue streams can increase profitability and reduce your reliance on non-guaranteed numbers, reducing volatility in your agency’s performance and growth projections.

Plus, unlocking new revenue streams on its own is an avenue for growth. Simply tapping into these additional streams will increase the total revenue your agency generates. As your revenue increases, so does the value of your agency.

4 Critical Revenue Streams For Independent Agencies

Prioritize these four revenue streams to maximize growth:

1. Commissions

2. Profit sharing

3. Fixed overrides

4. Growth incentives

1. Commissions

At a successful independent agency, commissions naturally are the lifeblood of your organization and the lion’s share of your revenue.

Yet, did you know the best commission-earning independent insurance agencies are also members of an agency network like Renaissance?

Small independent insurance agencies typically have access to a select group of carriers. When agencies band together in a network, they can access more markets and carriers typically only available to larger agencies. This provides more options for clients, and in turn increases hit ratios, retention, and boosts sales and commissions.

2. Profit Sharing

Profit sharing revenue is variable income based on the specifics of the carrier contract, typically a combination of loss ratios and growth.

Because these factors change every year and often outside your control, your profit sharing likely fluctuates every year. As a result, it’s not something you can budget for or reliably count on. It’s likely you’ve had some highly profitable years, and others where you’ve earned significantly less.

Joining an agency network like Renaissance can help increase your profit-sharing revenue, delivering stability and and reducing year-to-year volatility.

You can also earn from the first dollar of premium with Renaissance’s carrier partners, allowing you to earn on all of your premium, not just the ones you’re large enough to qualify for on your own.

3. Fixed Overrides

Overrides are an additional revenue stream not available to most stand-alone agencies. These are fixed or guaranteed factors paid on all new and renewal business, in addition to standard commissions and profit sharing. Most stand-alone agencies aren’t large enough to negotiate these overrides with their carriers.

Joining an agency network like Renaissance also gives you access to these fixed overrides on all new and renewal premium with multiple carrier and wholesale partners. This allows you to add a more reliable revenue stream in addition to commissions and profit sharing.

4. Growth Incentives

Incentives are a common tool used to boost sales, so it’s no surprise that it’s one of the potential revenue streams available for savvy insurance agencies.

Negotiating growth incentives based on new business production or overall book growth is a great way to add additional revenue to your agency. Most carriers only do this for agencies that possess a certain size or profitability of book, so they may or may not be available to you as a stand-alone agency.

You get the best payouts for growth incentives when you work with a partner like Renaissance that’s able to broadly negotiate with many carriers on your behalf.

Strength (and Profitability) in Numbers

Growth-focused independent insurance agencies need to tap into as many revenue streams as possible in order to maximize profits, and experience less fluctuations in income.

To summarize, agents should be earning:

  1. Commissions — standard or enhanced.
  2. Profit sharing — volatile revenue based on carrier contract factors, usually loss ratio, growth and size.
  3. Fixed overrides — extra income on all new and renewal business.
  4. Growth incentives — additional bonus revenue earned if you hit certain negotiated growth targets.

If your agency is seeking ways to further maximize revenue potential and ready to take full advantage of these four revenue streams, consider membership in an agency network like Renaissance. 

An image promoting a helpful guide for independent insurance agents

About Renaissance

Renaissance provides market access, placement services, technology and resources for independent insurance agents that want to grow their business and maximize efficiency.

Learn More

More Insights

Subscribe

Linkedin Youtube
Start the conversation
Renaissance Logo - White

155 N Wacker Dr., Suite 820
Chicago, IL 60606
(800) 514-2667

Linkedin-in Youtube
©2024 All Rights Reserved | Legal Notice

NON-DISCLOSURE TERMS AND CONDITIONS

These Non-Disclosure Terms and Conditions (“Agreement”) govern the provision of information by Renaissance Alliance Insurance Services, LLC (“Renaissance”) to a prospective agency member (“Recipient”). Renaissance and Recipient Renaissance and Recipient are hereinafter referred to together as the “Parties,” and each may be referred to separately as a “Party.”

The Parties acknowledge that Renaissance may disclose to Recipient certain of Renaissance’s confidential, sensitive and/or proprietary information including, but not limited to, business, financial or technical information, in connection with the potential establishment and/or conduct of a business relationship or transaction between the Parties (the “Transaction”). In connection therewith, for good and valuable consideration, the receipt and sufficiency of which consideration are hereby acknowledged by Recipient, and as a condition of the provision of Confidential Information (as defined below) to Recipient, Recipient hereby agrees as follows:

  1. Confidential Information. “Confidential Information” means any and all information provided by Renaissance to Recipient in any form, and at any time (including prior to or following the execution of this Agreement), including but not limited to any such information that (a) is related to Renaissance’s business, finances, financial information, pricing, business plans, profitability, projections, business or financial opportunities, investment strategies, other strategies, data, products, services, concepts, contacts, personnel, customers, vendors, prospects, intentions, formulas, methods, processes, practices, models, tools, computer programs, software, discoveries, inventions, know-how, negative know-how, business relationships, agreements (including this Agreement), intellectual property, trade secrets (whether or not patentable or copyrightable), trade secrets, or other confidential or proprietary information, (b) contains or is related to any communications, negotiations or proposals regarding the Transaction; (c) Recipient has either been informed, or reasonably should know, is confidential in nature; or (d) consists of or contains names, addresses or other information of any description relating to any of Renaissance’ member agencies or any of such member agencies’ customers or clients. Confidential Information shall also include any analyses, compilations, studies or other documents or materials prepared by Recipient or by any of its Representatives, that contain, rely upon, are derivative of or otherwise reflect any Confidential Information as described in the preceding sentence. The foregoing notwithstanding, Confidential Information shall not include any information which, at the time it is provided to Recipient; (i) is already known to Recipient, (ii) is then or later becomes available to the general public without violation of any requirement of confidentiality.
  1. Providing of Confidential Information. Renaissance may provide to Recipient any Confidential Information, in such manner and at such times as Renaissance may determine, to assist Recipient in evaluating, negotiating and carrying out the Transaction, but shall have no obligation to provide any, or any particular, Confidential Information to Recipient. Renaissance makes no, and disclaims any, representations or warranties regarding any Confidential Information it may provide, except as may be provided in any definitive documentation relating to a Transaction.
  1. Non-Use and Non-Disclosure; Representatives. Recipient agrees not to use any of Renaissance’s Confidential Information for any purpose other than for or in connection with the evaluation, negotiation, entering into or carrying out of a Transaction. Recipient agrees not to disclose any of Renaissance’s Confidential Information to any third party other than Recipient’s directors, officers, employees, affiliates, counsel, consultants, advisers, representatives and agents (collectively, “Representatives”) who have a reasonable need for the same in connection with the uses thereof permitted under this Agreement. Any such Representatives who are provided with any Confidential Information shall be instructed to maintain the same in confidence, and not to make any use or disclosure of the same other than as permitted under this Agreement. Recipient shall be responsible for any breach of this Agreement by any of its Representatives, to the same extent as though Recipient had committed such breach personally. Recipient agrees to use the same level of care in protecting the Confidential Information from unauthorized disclosure as it uses to protect its own confidential or proprietary information, and in any case will use no less than a commercially reasonable level of care in protecting all Confidential Information from unauthorized disclosure. The foregoing notwithstanding, Recipient shall be permitted to disclose so much of the Confidential Information as has been authorized for release by Renaissance in writing, to the persons and upon the conditions so authorized by Renaissance, in connection with the carrying out of the Transaction. Recipient shall not circumvent or seek to circumvent Renaissance’s negotiations with any third party, either by entering into discussions directly with such third party otherwise than on behalf of Renaissance, or otherwise. For purposes of this Section, each Party shall act in good faith and deal fairly with the other Party.
  1. No License; Return of Confidential Information. Recipient will not acquire any license or other rights whatsoever with respect to any of the Confidential Information by virtue of its disclosure to Recipient pursuant to this Agreement, or by virtue of any use thereof permitted hereunder. Recipient agrees to destroy or to return all Confidential Information to Renaissance, including both originals and all copies thereof (other than copies created as part of the routine backup of Recipient’s servers, or copies retained pursuant to a requirement of a governmental or regulatory authority, all of which retained copies shall be held confidential for so long as such materials are so retained), and to confirm the completion of such return or destruction to Renaissance in writing, promptly upon demand by Renaissance within the term of this Agreement. The term of this Agreement shall be for a period of five (5) years, commencing on the Effective Date set forth above. Either Party may terminate this Agreement at any time, upon written notice to the other Party, provided that the obligations of Recipient hereunder shall nevertheless survive for the period above stated, with respect to all Confidential Information provided prior to such termination.
  1. Orders Requiring Production. In the event Recipient receives a court subpoena, request for production of documents, court order or other requirement of a governmental agency to disclose any Confidential Information (a “Disclosure Requirement”), Recipient shall (unless prohibited by law) give prompt written notice to Renaissance thereof so that Renaissance may seek to challenge or limit the Disclosure Requirement. Recipient agrees to cooperate reasonably in any effort of Renaissance to limit or prevent any required disclosure of Confidential Information, provided that Recipient shall: (i) not be required to incur any expense in connection with such cooperation, and (ii) not be required to disobey any Disclosure Requirement. Recipient shall not be deemed in violation of this Agreement if it complies with any such Disclosure Requirement either after having provided Renaissance with notice thereof and a reasonable opportunity to contest the same, or if such notice is not permitted. Recipient agrees to (a) exercise reasonable efforts to disclose only the minimum amount of Confidential Information that Recipient is compelled to disclose, in the opinion of its legal counsel, and (b) request that confidential treatment (if legally permissible) will be accorded to the Confidential Information being disclosed.
  1. Injunctive Relief. Recipient acknowledges that the Confidential Information is confidential, and that disclosure or use of said information in violation of the terms of this Agreement would result in substantial and irreparable harm to Renaissance, the actual dollar amount of which damage would be impossible to determine. Accordingly, Recipient agrees that, in addition to any other remedies that may be available, in law, in equity or otherwise, Renaissance shall be entitled to seek injunctive relief against the actual or threatened breach of this Agreement or the continuation of any such breach by Recipient, without the necessity of proving actual damages and without posting bond. This provision shall not limit the right of Renaissance to seek actual damages or any other legal or equitable remedy for any breach hereof.
  1. Miscellaneous. This Agreement shall be construed in accordance with and governed by the laws of the State of Illinois, without regard to its conflicts of laws principles. Any action or proceeding against either Party relating in any way to this Agreement shall be brought and enforced only in the Federal (to the extent appropriate jurisdiction exists) and State courts located in Cook County in the State of Illinois, and the Parties irrevocably submit to the jurisdiction of such courts in respect of any such action or proceeding, and irrevocably waive any objection to venue in such courts, including but not limited to any objection that such venue is inconvenient. This Agreement embodies the entire agreement of the Parties with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements and understandings, oral or written. No amendment to this Agreement and no waiver of any provision hereunder shall be effective unless it is in writing and signed by an authorized officer of the Party against whom such amendment or waiver is asserted. No invalidity or unenforceability of any provision of this Agreement shall affect the validity or enforceability of the remaining portions hereof. This Agreement shall be binding upon, and shall inure to the benefit of, each of the Parties and their respective successors and assigns. There are no intended third-party beneficiaries of this Agreement. This Agreement does not in any way bind either Party to enter into or continue any type of business relationship with the other. Nothing in this Agreement shall prevent Renaissance from at any time disclosing any of its Confidential Information to others or negotiating with others for any purpose whatsoever. Nothing contained in this Agreement shall be construed to constitute the Parties as partners, joint venturers, co-owners or otherwise as participants in a joint or common undertaking. Recipient’s indication of assent to this Agreement via electronic means shall be equally binding and effective as an original signature hereon, and shall be deemed duly and effectively delivered if so transmitted or provided.