May 3, 2019
4 Reasons to Join Agency Networks
by Rick Fox
While it’s easy to get stuck in the routine of working IN the business, it’s critical for independent agents to also work ON the business.
Agency associations have been around for years, providing advocacy and resources for independent agencies around the country. Also known as agency networks, clusters or aggregators, these organizations play an integral role in the insurance ecosystem, building connections between agencies, carriers and partners to help both grow business and better serve the needs of customers.
While many independent agencies have opted not to join these networks, sometimes deterred by the cost of membership, these organizations can provide valuable return on investment. At a recent event, I spoke with a network executive who said his agencies are seeing a nine-to-one ROI for independent agents. This ROI is impressive and further evidence of why agents should consider participating in these groups. The resources and access to carrier and vendor relationships deliver measurable value for independent agencies of every size.
At the same time, carriers and vendors are also investing in network relationships. Investment in new programs like Vertafore’s, specifically aimed at championing the independent agent by working with industry associations, clearly underscore the value of these networks as part of the insurance industry. This kind of purposeful investment, putting the right people and the full support of the company behind it, is a strong endorsement of the association model.
See also: 3 Ways to Boost Agency Productivity
Another hurdle for independent agents is that they’re simply too busy running the agency to investigate new opportunities. But as buyers’ expectations for price, convenience, service and product availability have grown, many independent agents have found themselves struggling to keep pace. They’re so busy scrambling with their heads down to keep up with their current business, they hardly have opportunities to look up and see what’s happening in the market around them.
But as competition gets tougher and customers gain more flexibility of options, independent agents can’t afford to keep their heads down. Network membership can help here, too, introducing agents to resources, technology and services that can help them work more efficiently and identify new business opportunities to develop.
If you’re on the fence about agency networks or skeptical of their value, here are four reasons you need to make joining one a priority this year:
- Access to new carriers and products through aggregation. For small agencies, it can be tough to get appointments with carriers if you can’t support the volume of business they require. Trying to meet the quotas or milestones to keep multiple appointments can be difficult, and some carriers won’t work with agencies if they’re under a certain size. This can lock small agencies out of writing new business or securing new products their customers are demanding. Joining a network lets the independent agencies band together to hold those appointments and feed the appetite of the carrier at a much higher level.
- Buying power with vendors. The industry is being driven by technology integration, not only as a means of serving customers’ expectations for a modern, tech-savvy experience, but also for efficiency and workflow productivity for the day-to-day operations at an agency. But those software and solutions can be expensive, especially for the small-volume licenses that small independent agencies would need. Vendors are eager to work with agency networks to offer more value and partnership. The vendors benefit from the access to new customers and agencies can take advantage of the latest solutions that may have been out of their reach if not for the collective power of the group.
- Networking opportunities. Keeping yourself glued to the agency 365 days a year can be a mistake. Even when you’re busy serving clients, it’s also isolating you from market trends and developments that your counterparts are eyeing as opportunities. Agency networks offer networking opportunities to meet with and learn from your colleagues, to build relationships that can help solve mutual challenges or share creative solutions or strategies. Whether it’s an annual conference, a workshop group or even just a meet-and-greet, being involved in your industry community can open doors of opportunity through shared wisdom and resources.
- Thought leadership and access to expertise. The network itself can be a source of knowledge, resources and expertise on relevant issues like how to run and grow your agency, how to make inroads into a new, niche market or how to manage mergers and acquisitions. Just like it aggregates carrier access and vendor relationships, the agency network can be a tremendous source for aggregated knowledge, providing thought leadership and counsel that can help member agencies grow business and access new markets and opportunities.
When looking for an agency network to join, choose one based on what it can offer to meet your needs. Don’t just consider what it will cost but, more importantly, what you will gain. Ask to talk to other members or vendors as a reference to get a broader perspective.
The right network or association will be in a leadership position in the industry to provide information, resources and expertise to help you grow your business. It should work diligently on behalf of its members to build partnerships with carriers, vendors and tech services.
See also: Expanding Into Small Commercial
While it’s easy to get stuck in the day-to-day routine of working IN your business, it’s critical for independent agents to also make it a priority to work ON your business. The biggest risk to agency success is inertia—simply staying in the same spot. With the rapid pace of technology development, market evolution and shifting consumer expectations, you can’t afford to get left behind. Getting involved in agency associations and networks is a smart investment that can help your business stay ahead of the trends to grow and thriv