Why a Cluster or Aggregator? What Other Options Are There

shawnmwalker

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Colorado
I wanted to take a moment and address a significant question. Why join a group? What other options are there?

What are your options?
1. Buy an Independent Agency
a. Got to Agentequity.com to find one big enough that the carriers are well fed and plan on staying around after the new owner takes over.
2. Start from Scratch
a. Very difficult to get and feed multiple markets and get additional compensation for years

3. Join the RIGHT group
a. Many Markets, more compensation from day one, ownership, Lower than street cost for common agency tools.
4. Stay Captive but Switch carriers.
a. I had an agent ask me once, “Is it what you do or where you are at that you don't like?”
b. Will another captive carrier culture make you happy?
5. Join an agency or group that does your backroom support
a. Take a large commission cut
b. Often no ownership
c. Often no overrides
d. Often no bonus
e. Often no additional compensation


Why do Aggregators work for all parties involved?
1. The Carriers like it because:
a. Good groups Vet the agents.
b. Good groups ask their agents to be concerned with and control their books of business
c. Good Groups line up the correct products with the correct business plan
d. Good Groups can sell the Carriers product faster by offering more money and exciting 100’s of agents at a time instead of mom/pop shops. (One agent at a time)
2. The Agents like it when they join the right group because:
a. There is more money from Day one.
b. More access to carriers from day one.
c. There is training and support from Day one to help an agent through the learning curve.
d. There is no longer a DM making you write Life.
e. There is freedom to run your business the way you want.
f. There is little to no commitment to produce.
3. The Good Group likes it because:
a. They get a % of the pie.
b. They can negotiate the power of the group with more agents and more geographical spread and share the benefit more.



There are so many options when starting out and going Independent! Slow down and consider them all!
 
Slow down and consider them all!

considering them all would be overkill and would waste a lot of time. you really need to filter such a long list with weed out factors. for example:

  • do not consider anyone that doesn't let you own the book of business.
  • do not consider anyone that doesn't give you immediate binding authority.
  • do not consider anyone that forbids you to have direct appts. outside of the cluster.
those would be my weed out factors. everyone else's criteria may be different. but to me, any cluster worth their salt should at least pass the above filters.
 
But that is assuming that the Cluster is the best route.

To be honest, I don't know the difference between a cluster, aggregator and whatever else they're called. I just happen to call them all clusters.

If clusters are the only group who can pass through those filters, so be it. Without those 3 filters, I think an agent is swimming uphill. Just my opinion.


  • when I close on a sale, I want to be able to bind that policy in less than 5 minutes. I don't want the customer to go home and think about it, or do more shopping while waiting to get binding approval.
  • I also wouldn't want to write policies if I'm not building up my own book.
  • and being banned from getting outside direct appts. to me seems to defeat the purpose of being an indy agent.
 
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the P and C side of the insurance industry is filled with Gangster style aggregators where you have to give your first born to get a contract...all reasons listed above for the 'cluster' mentality are absolutely ridiculous and outdated...the P and C industry sucks big time, its multilevel marketing at its best and is based on a 1950s way of doing business...
 
I love my cluster....

I have had reps tell me they wont add a new agency UNLESS they are part of a cluster....

I referred an agent to my cluster they chose a different one, and they call me all the time, can you do this, can you do this, I say yes every time, then i say try this place or etc, they say, we dont get this or that etc, i say you joined the wrong cluster, its NOT ALWAYS ABOUT THE MONEY!
 
the P and C side of the insurance industry is filled with Gangster style aggregators where you have to give your first born to get a contract...all reasons listed above for the 'cluster' mentality are absolutely ridiculous and outdated...the P and C industry sucks big time, its multilevel marketing at its best and is based on a 1950s way of doing business...

Your right Health Guy. I'll just give up my book and sell Ocare instead. How's that paycheck....
 
This is a good thread for anyone interested in starting into P&C. There is some useful information here.
 
I wanted to take a moment and address a significant question. Why join a group? What other options are there?

What are your options?
1. Buy an Independent Agency
a. Got to Agentequity.com to find one big enough that the carriers are well fed and plan on staying around after the new owner takes over.
2. Start from Scratch
a. Very difficult to get and feed multiple markets and get additional compensation for years

3. Join the RIGHT group
a. Many Markets, more compensation from day one, ownership, Lower than street cost for common agency tools.
4. Stay Captive but Switch carriers.
a. I had an agent ask me once, “Is it what you do or where you are at that you don't like?”
b. Will another captive carrier culture make you happy?
5. Join an agency or group that does your backroom support
a. Take a large commission cut
b. Often no ownership
c. Often no overrides
d. Often no bonus
e. Often no additional compensation


Why do Aggregators work for all parties involved?
1. The Carriers like it because:
a. Good groups Vet the agents.
b. Good groups ask their agents to be concerned with and control their books of business
c. Good Groups line up the correct products with the correct business plan
d. Good Groups can sell the Carriers product faster by offering more money and exciting 100’s of agents at a time instead of mom/pop shops. (One agent at a time)
2. The Agents like it when they join the right group because:
a. There is more money from Day one.
b. More access to carriers from day one.
c. There is training and support from Day one to help an agent through the learning curve.
d. There is no longer a DM making you write Life.
e. There is freedom to run your business the way you want.
f. There is little to no commitment to produce.
3. The Good Group likes it because:
a. They get a % of the pie.
b. They can negotiate the power of the group with more agents and more geographical spread and share the benefit more.



There are so many options when starting out and going Independent! Slow down and consider them all!

Bottom line, IMHO , having the direct code with carrier, binding authority and being paid by carrier is paramount with any aggregate or cluster. Having outlets that theaggregator has is a plus, but pain in the arss . The aggregators take more and you work harder to place the bus plus get paid less. Agents need direct codes.
 
AZDave you tough guy..Health insurance checks never been better...I forgot you and SIAA kool aid drinker? Hows that buyout agreement LOL ? toughguy
 

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