In the insurance world, there are two kinds of agents offering policies to their customers: captive agents and independent agents. Captive agents are insurance agents that work for a single large insurance carrier. Your local State Farm agent or an agent working in a call center is an example of this.
Independent agents, on the other hand, are self-employed and often work with various insurance companies as a broker to help their clients get the best rates and coverage. Being able to offer competitive rates from various carriers is one of the advantages of being an independent agent.
Agents can also become an independent insurance agent under the umbrella of an insurance aggregator, and each role has its pros and cons. A captive agent has a billion-dollar corporation behind them running national TV ads that get qualified leads every day, while an independent agent needs to pound the pavement and hit the phones to find their own leads. However, the independent agent has much more flexibility.
Is Going Independent Worth It?
If you have the motivation to generate your own leads and a way to supplement your income while you build your new business, becoming an independent agent can be extremely lucrative.
The problem is, however, that even if you have money set aside to help establish your own independent agency, independent agents are often limited to working with one or two insurance companies. This is because of volume commitments and quotas set by these companies that the independent agent must meet or otherwise risk being dumped as an authorized broker.
What this means is that many independent agents become “captive” all over again, albeit to a boss with two heads instead of one. The moment they try to wrangle a contract with a third or forth insurance company, the first company releases them, because even the best agents can’t be in three or four places at once.
This is where insurance aggregators come in. But, what is an insurance aggregator?
How Aggregators Work
You can think of an aggregator sort of like a labor union. Multiple independent agents work together as one unit in order to obtain favorable contracts with multiple insurance companies. In this way, an independent agent who works through an aggregator has access to many more companies than they could possibly service themselves.
I Work Under an Independent Agent as a Producer, How Can I Move Up?
If you want to climb this ladder, you’ll either have to buy out your boss if they’re willing to sell you their book, or you have to go out on your own. Unfortunately, the costs of setting up your own agency and convincing large carriers to sign you on as an appointed agent are difficult challenges to overcome. So what can you do to make this process easier? One option is to work with an aggregator.
At Insurance Pro Agencies (IPA), we’re different from the competition. We understand that people have families and can’t be in the office and on the phone 24/7 to hit this month’s quota. We offer our independent agents a chance to work from home without strict quotas; we also offer book ownership rights and the right to take your book with you should you choose to leave.
Additionally, we know that many insurance agents, both captive and independent, risk losing commissions when policy rates go up and their clients head for cheaper competitors. This can lead to frustration, as you’ll have no one else to turn to in order to keep those clients.
By working with IPA as your aggregator, you’ll be able to save that client by placing them with any number of other insurance carriers we work with. Keeping clients means that the commissions don’t stop rolling in and your book continues to grow.
Your Next Steps
While that passive income stream is great and it should continue to grow, eventually, everyone wants a golden parachute for retirement. The ability to sell your book and take the lump sum payout is a key advantage of working with IPA. Take the next step, and see what IPA can do for your career as an independent agent!