Pros and cons to being an independent agent
Are you considering the freedom you might experience by becoming or transitioning into an independent insurance agent? Here are some things you might want to consider. We will start with the cons and move to the pros.
1. Having to meet production requirements
2. Expenses that a captive carrier might pay all or part of for you
3. Expenses you may not have now, such as leasing an office.
4. Perhaps less name recognition than some of the big captive carriers to have.
1. Often better commissions
2. Larger choice of carriers means a chance at being more competitive
3. Flexibility with coverage, underwriting, etc.
4. More independence and less company bureaucracy
Now, let me write about these Pros and Cons. One of the Pros of being an independent insurance agent is having multiple carriers to choose from for your clients rather than just 1. These men you are more likely to be competitive on every bid or quote you do and your close ratio will be higher; however, this pro can also be a con in that, each carrier will ask you to produce a certain amount of premium every year in order to maintain your contract with them. If you are a solo shop, this can be tough to do if you get more than 3 or 4 carriers. One way to combat this is to join an aggregator or cluster group. A cluster group is essential when a bunch of agents come together and pool their books and premium volume together within one agency. This keeps carriers happy and instead of 4 to markets, you might now have 10 or 15 or even 20. Think of all the options you now have at your fingertips. Insurance Professionals of Arizona is just such an organization, at least it functions that way. We are kind of a hybrid model. You can still maintain your independence and autonomy but take advantage of being associated with a larger brokerage. Other advantages of this are reduced expenses for things like office space, management software, rating system, Errors and Omissions expenses, and more.
If you would like to sit down and talk more about becoming an independent insurance agent, whether you are new in the business or have a large book of policies to bring, call IPA at 480-981-6338 and ask to speak with Kent Stewart. Going independent may be just the thing you need to jumpstart your career or to reinvigorate yourself as a veteran insurance agent. Join us, get competitive again, write more business and start enjoying being an insurance agent again. We look forward to working with you.