If you own a property and casualty insurance agency, it may be a good idea to join a cluster. They’re similar to insurance aggregator companies, but they operate a bit differently. You may already know the best insurance aggregator to join, but we’ll help you determine the best cluster to join if you choose to go down that route instead.
Let’s explore property and casualty clusters in depth. We’ll discuss what they do and how to find high-quality organizations; we’ll also explore insurance aggregators, because we at Insurance Pro Agencies (IPA) are one of the best in the midwest!
What Is an Insurance Cluster?
Put simply, an insurance cluster is a group of agents, agencies, and brokers who come together to support one another using the resources they each have–they also combine their books to improve how they look to insurance carriers. This provides their clients with more options to choose from.
What Is an Insurance Aggregator?
As mentioned above, insurance aggregators are different from clusters. Aggregators are companies that provide access to a variety of different insurance carriers that independent agents might not have had access to before. Unlike in a cluster, you qualify to work with carriers on your own with the help of the aggregator’s network.
What Are the Benefits?
So, what is the role of aggregators in insurance? What’s the point of clusters? The goal of both clusters and aggregators is to provide agents with greater access to insurance carriers. They also provide access to tools that agents may not typically have access to on their own.
Joining a cluster is a great decision for agents who have something to contribute, but can also benefit from what others have to offer. Aggregators are better suited for newer agents.
How to Find the Best Cluster to Join
Joining a cluster is simple, but there are still some important things to keep in mind when choosing one. Consider the following when cluster shopping:
Evaluate the Cost
Joining a cluster isn’t free–there are initiation fees, the occasional startup fee, and monthly fees. These payments can range from less than $100 to more than $200 a month. Take a look at your agency’s finances and see which clusters you can afford before choosing one–of course, it would be ideal to find one that doesn’t charge a startup fee.
Evaluate the Production Requirements
Unlike aggregators like IPA, clusters often have quotas you need to meet for production. Make sure you’re able to meet those requirements before joining a cluster, especially because it costs money to leave. The vast majority of clusters will charge an exit fee to agents leaving the cluster.
Evaluate Their Location
Clusters are typically regional, and if they don’t operate in your area, they probably won’t be able to serve you well. Additionally, if you move, you might wind up outside of a cluster’s covered area. Consider organizations that have a wider reach to avoid any issues down the road and to ensure that your location is included.
IPA Is the Top P&C Aggregate in Illinois
Joining a property and casualty insurance cluster has its benefits, but we prefer aggregators instead. If you’re looking for an aggregator to join, consider becoming a member of IPA. We offer training, support, and the tools of the trade to make your job as an insurance agent easier. Contact us today to get started!
