How Do You Know When It’s the Right Time to Partner With a Network?

Worried about what could be next for your agency? It has been a chaotic couple of years — and many forward-thinking businesses are focused on improving revenue, expanding their client base and future-proofing their strategies.

It’s important because right now, insurance disruption is high, and competition is fierce. As a result, you might be wondering whether it’s the right time to partner with a network. It’s a good question, and one that should be considered carefully. Taking on a business partner is a big decision. The relationships you build can make or break the future success of your company, so it’s not a deal to enter lightly.

For insurance agents, the decision to partner with a network can provide significant benefits. Nevertheless, you might be wondering whether the timing is right.

Here’s a look at some of the factors you should consider when deciding whether it’s the right time to partner with a network, along with key insights from insurance agents who have made the decision for themselves.

A Network Can Bring Unique Value

Before delving into the question of timing, let’s look at the value that a network can bring. After all, without this value, a network partnership wouldn’t make sense at any time. Networks can provide:

•Access to carriers and products;

•Product training and guidance;

•Sales and marketing support;

•Low production requirements;

•Competitive commissions ;

•Strategic consulting on acquisitions and book rolls.

The Stage of Agency Growth Doesn’t Matter

It’s easy to fall into the trap of thinking that a network partnership should happen at a certain stage of agency growth, but that’s not really the case. Partnering with a network can bring benefits regardless of the stage you’re in.

A new startup might need network support to get a fast start and break into the business. An experienced agent might need the help of a network to make the transition from captive to independent. A successful agency could use network support to stay competitive and grow in a changing market, or to operate more efficiently.

It really doesn’t matter whether your agency is new or established. So, what does matter? How can you decide when it’s the right time to partner with a network? It all comes down to understanding your current challenges and objectives.

Below are a few of the most common goals that can be achieved by partnering with a network.

Goal #1: You Need Access to More Carriers

To help your clients find the best coverage fit for their unique exposures and budget, you need access to carriers. This isn’t always easy. Many carriers have production requirements that prevent smaller agencies from offering their products.

For insurance agents who are building a startup agency from scratch, this is a common challenge. Take Pennsylvania agent, Gulraiz Sultan, for example. He had significant insurance industry experience as a claims adjuster, risk manager and insurance analyst, but after he earned his insurance license, he was denied his first carrier appointment. Fortunately, he found an alternative solution. He turned to a network that he says could “really help you get your foot in the door with carriers.”

Thanks to this partnership, he was able to start getting appointments and eventually grow his book of business to more than $1 million annually.

Agents who are transitioning from captive to independent can face similar struggles. Although they have the experience necessary, they may not have the relationships with carriers in place that they need, and they may need assistance learning the ins and outs of daily agency operation when going out on their own.

“I want to be the change that I want to see. I don’t want to just wish it would happen,” says agency owner Jeremy Powers.

He started out as a captive agent, but he later became an independent agent to better serve his customers. With a network, he was able to navigate the transition successfully and gain crucial appointments quickly, while also receiving mentorship from his network’s state representatives.

At any level, a network can provide access to carriers that might otherwise be out of your reach. If you’re having trouble accessing the carriers you need so you can serve your clients and grow your company, it might be time to consider working with a network.

Goal #2: You Want to Leverage Profit Sharing Opportunities

Insurance agents face a lot of competition. They compete with other independent agents, and also with insurance companies that utilize captive agents and direct-to-consumer sales tactics. On top of all that, they need to strategically navigate mergers that result in their competitors getting bigger and bigger.

Even experienced agents with established agencies can run into trouble when the market changes. Anytime you need to pivot, you may meet resistance.

“It’s tough to get carrier appointments, especially if you’re in a town where there’s a lot of competition and those carriers have already appointed other agencies. It makes it even tougher to increase revenue,” says Bryan Clinkscales, owner of Boone-Ritter Insurance.

When M&A activity increased, Clinkscales knew he had to start growing through acquisition or his agency could be at risk of being acquired. One of the companies he purchased was a network agency partner. He then realized that a network presented new opportunities to boost his profitability.

“We’ve got $2 million with just one carrier that we moved over,” Clinkscales says. “But we also had these small books with carriers that we were struggling to grow, to get to profit sharing level. Now we’ve reached profit sharing level just by moving those books over to the network, and those accounts add up to another $1 million in premiums. I can’t wait to see the year-end numbers!”

Goal #3: You Want the Flexibility to Keep More Clients

It’s hard to grow your business if you keep losing customers. But without support from a network, it can be difficult to keep certain accounts.

That’s one reason Lee Ann Pridgeon, owner of AllCare Insurance Service, recommends partnering with a network. She purchased the agency she had worked at for 15 years and went on to acquire several more agencies. Most of these agencies were part of the same network.

“I’ve encouraged several friends to join a network when they want to grow without dealing with volume commitments,” she says. “A network with an ‘agent-friendly contract’ allows me to write a policy for somebody, even if they’re the only one I’ll write. I’d rather write one policy with a company that I use rarely and not lose that customer than turn anyone away.”

Goal #4: You Plan to Buy or Sell

The stories shared by Lee Ann Pridgeon and Bryan Clinkscales demonstrate how important mergers and acquisitions can be when you’re trying to stay competitive.

A network can help you connect with agency owners when you want to buy or sell. You can even leverage a network’s partnership with banks to finances your transactions.

The Deloitte 2022 Insurance Industry Outlook says that the insurance industry is expected to experience accelerated growth in 2022. This is great news, but it doesn’t necessarily mean that everyone in the insurance industry is going to benefit.

Insurance agents need to find a way to tap into this growth while anticipating and navigating risk. A network can help you do it. As an independent agent, it can be challenging to grow your business when you’re up against larger players, but a network can give you the tools you need to fuel growth.

The Bottom Line: A Network Can Help You Achieve Next-Level Goals

The insurance industry is changing rapidly. Whether you’re just starting out and need to get a foothold in the industry or you’re an experienced insurance professional who is trying to stay one step ahead of disruption, a network can help you grow your business.

Ask yourself these questions: Could some additional support help you achieve your goals this year? Could you benefit from the carrier access, training, connections and strategic consulting that a network could provide?

If you want to accelerate your success and take your business to its full potential, then now is the right time to consider partnering with a network.

Topics Carriers Agencies Market