Do I need a cluster?

[Mandrews60]

My family has a p & c agency with about 1.7 million ap. I'm starting to add life and health to the business and have got with a couple of fmo's. About 90% of the p and c business is with one carrier, but we aren't a captive agency. Should I try to connect directly with carriers or do I need to reach out to an agency cluster? The more p and c business we do, the more opportunity I'll have to expand mine. I've been dealing exclusively with life and health and don't have much of an idea where to start on the p and c side. Any suggestions would be appreciated.

 

[shawnmwalker]

Well you have a decision tree here. I'll lead you down one path, but it is biased.



"Begin with the end in mind"- 7 habits of Highly effective people.

Decision #1:



What end of the Ins Spectrum do you want? if you answered P&C keep reading. If ''Other" wait for the others to respond



Decision #2: Captive or Independent.



Captive:

Pro: They will teach you a lot but inevitably you will go Indy at some point in your career. Another Pro, they will subsidize your life for a time.

Con: The District Manager will push too hard or force life on you or cut your commissions or change your contract, or, ext, ext. Your Captive will take rate increases and kill your production and you will have one price point while others dissect your book one policy at a time.



Independent: :

Pro: Control expenses. Get higher commission. Higher conversion. Higher retention. All of those factors equal more money.

Con: Starting out. Getting knowledge. Your personality type could sink yourself.



Decision #3:



Once you decide Indy is for you, in the next week or 22 yrs from now. The question will be how to do it. Your options include:



Buy an agency.

Join a group.

Become a producer for an agency.

Get direct appointments.

Get an agency that provides the back end service so you can hunt full time.



You decide which one is best for you.





Decision #4: What group should I join?



There are a lot. Consider the following. NOT ALL GROUPS ARE CREATED EQUAL! They range from good, better and best.



Any group claiming to be best of class should provide the following:

1. Transparency
2. Training and support
3. Carrier Alignment
4. and a great Contract

I have been in Insurance for 18+ years and the great thing in this industry is you can choose to never stop learning. Your learning curve is never ending. Meaning you will never get bored.

 

[Mandrews60]

I’m wanting to help expand the already established p and c agency. Joining a group or a cluster seems like a good idea. I’m busy with the life and health side, I guess I’m trying to decide what path to suggest to my family’s agency try to purse to grow.

 

[shawnmwalker]

What carrier are they almost exclusive to? How long have they had the agency and why only 1.7 in WP? What other carriers do they have?

 

[Mandrews60]

American farmers and ranchers, small company based in Oklahoma. The agency has been around for over 40 years. The agency was started by mom and grandma, they never had a desire to aggressively grow it. I’m not familiar with all of their carriers but AFR is their only standard insurance carrier. I feel like there is so much potential, I just need help getting pointed in the right direction

 

[shawnmwalker]

Seems like a perfect cluster play.....

 

[Mandrews60]

I’ve looked through some old posts that you’ve posted and trout. I think I’ve got an idea of questions that we need to ask a cluster

 

[Mandrews60]

Since the agency has been established for so long, would an aggregator also be an option? Do clusters provide tools to run multiple quotes at once, or give support in other ways ? What are the advantages of one over another?

 

[marindependent]

This seems like such an obvious question, but no one seems to be asking it:

What P&C markets are your clients needing that you cannot currently address effectively?

 

[Mandrews60]

Preferred and non preferred homeowners/auto, farm/ranch, and something commercial. We don’t have a commercial carrier at all