Independent agents taking their first steps into the insurance industry are often discouraged by the many barriers between them and the insurance carriers and products they would like to sell, such as property, casualty insurance, and health.
Insurance Market Access providers, or MAPS, are one solution, helping independent insurance agencies join forces to achieve the premium volume required to gain access to the products they want.
What are the Pros & Cons of Joining an Insurance Market Access Provider?
Joining a MAP allows its member agencies to play in the big leagues. While an independent insurance agent may have a book of business that is not large enough to qualify for selling personal lines, for example, by combining portfolios and negotiating together they will have the clout to get better commissions and market access.
Economies of scale are another great incentive to join a Market Access Provider: software licenses are expensive, but sharing costs like those will be beneficial to your budget.
MAPs are for-profit businesses. While you may think of paying dues and fees as a con to joining a MAP, remember that a very low cost one can’t be delivering to its members, because they don’t have the revenue to do so. We have all heard the saying “you get what you pay for.”
SIAA is not like every other MAP: we are the largest agency alliance in the country. We are not the cheapest MAP, but we offer a lot more than just a standard market access provider. SIAA has 48 regional Mastery Agencies that work with the members in their area, giving you access to local leaders with decades of experience as insurance agents and owners.
How to Choose an Insurance Market Access Provider
There is no straightforward answer to this question, and choosing the right network, cluster, or alliance will require research and careful consideration. However, you can simplify your search with a few questions that will narrow the field:
- What carriers does this MAP offer? Are there products here I really could profit from?
- What are the requisites to join? Am I even eligible?
- Do I retain ownership of my book, or does the group become an owner in my agency?
- What are the exit protocols? Will I be bound to this network for the long term? Will I be able to work with the same carriers if I ever decide to leave?
Are All Insurance Groups the Same?
There are as many types of insurance groups as there are styles of insurance agencies. People will gather when they have similar values, goals, and priorities, and this will be reflected in the rules and regulations of each market access provider.
Some will have profit as a priority, while others may dedicate a lot of time and effort to training and coaching. Some insurance clusters will make it very hard for you to leave, while others will keep a loose grip and persuade you to stay through benefits and profit-sharing.
This is why we are so insistent on you doing your due diligence: interview current and former members, read reviews, ask to see the agreement, and run it by a lawyer before you sign in.
In SIAA, we believe in the independent agency distribution system. We respect our members’ ability to operate independently - while we offer guidance, counsel, and best practices, the decision is still yours on how to run your agency.
7 Things You Should Know Before You Join
Print this out as a checklist, and get answers from several insurance clusters you like. If you are happy with all or most of the answers, you are probably on the right track.
1. How much will I have to pay to join, and on a regular basis?
Get your fees clear and on the table. If there is a sign-up fee, get it in writing. Same with monthly fees (or commission percentages) and maintenance fees. Be sure to know if they are flat fees or commission percentages, and decide which works best for you.
2. What will it take to leave if you choose to do so?
Attrition is bad for insurance clusters since it diminishes their negotiating power and increases everyone’s share of the expenses. However, elevated exit fees are not necessarily the best way to ensure retention, and you should take them with a grain of salt.
Some clusters have a non-compete clause in the contract, which may prevent you from working for months or years after you leave. Remember: before you join you need to know how much you would be expected to pay if you decide to leave.
3. Will you retain full ownership of your book?
In many cases, when you join a cluster you sign off 10-50% of your book to the group. This may work out for you, but remember that if you ever decide to leave you will probably have to buy your own accounts from the group.
4. How do commissions and profit-sharing work?
A cluster may have excellent rates and get generous commissions from insurance carriers, but that doesn’t necessarily mean they get passed on to all members in an equitable manner. Find out if you need to do anything to qualify for profit-sharing, and how you will be protected from other member’s losses. Demand transparency regarding the commission statements to know how much the cluster leadership is retaining vs. passing on to members. Are commissions paid directly to you, or do they go to the group and then get filtered down to you later?
5. Let’s talk carriers
A cluster may have the longest, most enticing list of carriers, but will you have access to all of them? Immediately? If not immediately, when?
Find out if the carriers are available in your state, and if they offer the type of insurance your customers need - otherwise, it would be like having 300 cable channels all playing shows you don’t want to see.
A very important question is whether you will get direct access to the carriers, or whether business must be run through the cluster. If your goal is to grow your independent agency, working directly with carriers and their reps is a must.
6. Let’s hear about the perks!
Find out what the cluster offers, and get granular with it. “We offer customer support to all members” sounds great, but what is the ratio of support staff to member agencies? Get the detail of the services offered to cluster members. How are they going to help your agency grow? If they are cheap to join or don’t charge much, how are they going to justify spending any time helping you?
Are there discounts for valuable software packages that will make you more efficient? Get all of this information in writing, and have a lawyer review the contract with you to make sure everything is on the table.
7. How will this cluster help me grow?
The best clusters will offer training, coaching, and mentoring, to help all of their members grow as independent agencies. Ask what the cluster offers in terms of training opportunities, both internal and external, and whether there are internal mentoring or coaching programs. Can they help you expand into other lines of business? How much experience do they have as a producer? Did they ever walk a mile in your shoes as an agency owner? If your goal is to grow your agency and your business, this is something you definitely want.