Agent compensation has been cut in half from years ago. This greatly hurts the ability for insurance agents to stay in the business, especially new insurance agents. Unless insurance companies start paying higher commission rates the failure of new agents will continue. The new model of insurance companies is to hire anyone walking in the door and allow them to fail and keep the business they wrote while there. This new setup is a disaster waiting to happen. Insurance companies are no longer providing the service they used to give. And, sadly that includes some of the best companies. My fear is that they are going down the toilet. Service is just as important as higher commissions, competative rates, claims, ect. Without each being well taken care of the insurance industry will be getting worse and not better.
We need to go back to square one. And, I think that means more captive agents becoming independent.
Susan Rocha, I do not disagree with what you say. Instead of supporting your efforts to provide a professional service to the public, our carriers want you to support THEM, as if they are your employer. They come to you each year with a carrot and a stick – the stick being the threat of losing their contract if you they aren’t the first dance, even if they have no-can-do underwriters and are uncompetitive. They do nothing to promote themselves, relying on you to purchase from them marketing materials. Meanwhile, the carriers they see as their competition – the direct-response and captives spend literally hundreds of millions of dollars promoting their brand – and in many cases, their agents. Though we IAs are the best educated, most knowledgeable and in the long run, least costly distribution system, we get the short end every time, even from companies like Encompass who Allstate has locked in the cellar while they blow billions pushing direct-response dog food-quality Esurance.
Perhaps agencies’ overall disatisfaction as expressed in this spot-on survey results from the fact that it is increasingly more difficult for carriers to serve both policyholders and agencies at the same time. In order to maintain or increase revenue and maintain margin, carriers feel pressure to reduce expenditures on agency training, marketing support, breadth of product and agency compensation. As the structural evolution of the marketplace becomes increasingly profound, agencies will turn to other emerging structures to serve their needs, such as agency clusters. Quality agencies increasingly rely on quality clusters to shore up compensation, provide strategic market intelligence and sales assistance and intercede on claims issues. As IJ reported earlier this year, there has been a rapid rise in cluster membership by agencies of all sizes. And on the flip size, mainstream carriers are looking to quality clusters to provide the marketing assistance and agency vetting and oversight at a level they can no longer afford to do on their own.
Mainstream carriers are NOT looking to clusters to provide marketing assistance, they are using clusters (or “producer groups”) as the new standard for production. Anybody who is TRULY independent gets monthly production reports and incentive contest standings and is immediately turned off by the notion that the carrier expects everybody to produce at these levels, when in reality it is the collective production of a vast number of smaller drone agencies that make clusters, or producer groups appear to be the norm. Every time I get a MetLife Auto and Home contest update, all that I see is the AAA agency in every state leading the way and on pace for receiving A TRIP for ONE agency person and a guest. Gee, thanks. I became an independent to produce the kind of book of business that I wanted, not the regional vice president of a cluster or the regional rep of a carrier.
John brings up an important concern of Independent agents: the possibility of losing access to individual production reports and incentive contest qualification. While these are not issues with members of United Valley members due to our member criteria and focus, clustering can obscure and dilute the contributions of individual agency members, possibly diminishing the rewards for growing and successful agencies. So what do you other agency owners believe: does cluster membership help or hurt the essential 3-way relationship between policyholders, agencies and carriers?
I’d like to see what those agent’s carriers would have to say about the change.
Agent compensation has been cut in half from years ago. This greatly hurts the ability for insurance agents to stay in the business, especially new insurance agents. Unless insurance companies start paying higher commission rates the failure of new agents will continue. The new model of insurance companies is to hire anyone walking in the door and allow them to fail and keep the business they wrote while there. This new setup is a disaster waiting to happen. Insurance companies are no longer providing the service they used to give. And, sadly that includes some of the best companies. My fear is that they are going down the toilet. Service is just as important as higher commissions, competative rates, claims, ect. Without each being well taken care of the insurance industry will be getting worse and not better.
We need to go back to square one. And, I think that means more captive agents becoming independent.
Susan Rocha, I do not disagree with what you say. Instead of supporting your efforts to provide a professional service to the public, our carriers want you to support THEM, as if they are your employer. They come to you each year with a carrot and a stick – the stick being the threat of losing their contract if you they aren’t the first dance, even if they have no-can-do underwriters and are uncompetitive. They do nothing to promote themselves, relying on you to purchase from them marketing materials. Meanwhile, the carriers they see as their competition – the direct-response and captives spend literally hundreds of millions of dollars promoting their brand – and in many cases, their agents. Though we IAs are the best educated, most knowledgeable and in the long run, least costly distribution system, we get the short end every time, even from companies like Encompass who Allstate has locked in the cellar while they blow billions pushing direct-response dog food-quality Esurance.
Perhaps agencies’ overall disatisfaction as expressed in this spot-on survey results from the fact that it is increasingly more difficult for carriers to serve both policyholders and agencies at the same time. In order to maintain or increase revenue and maintain margin, carriers feel pressure to reduce expenditures on agency training, marketing support, breadth of product and agency compensation. As the structural evolution of the marketplace becomes increasingly profound, agencies will turn to other emerging structures to serve their needs, such as agency clusters. Quality agencies increasingly rely on quality clusters to shore up compensation, provide strategic market intelligence and sales assistance and intercede on claims issues. As IJ reported earlier this year, there has been a rapid rise in cluster membership by agencies of all sizes. And on the flip size, mainstream carriers are looking to quality clusters to provide the marketing assistance and agency vetting and oversight at a level they can no longer afford to do on their own.
Mainstream carriers are NOT looking to clusters to provide marketing assistance, they are using clusters (or “producer groups”) as the new standard for production. Anybody who is TRULY independent gets monthly production reports and incentive contest standings and is immediately turned off by the notion that the carrier expects everybody to produce at these levels, when in reality it is the collective production of a vast number of smaller drone agencies that make clusters, or producer groups appear to be the norm. Every time I get a MetLife Auto and Home contest update, all that I see is the AAA agency in every state leading the way and on pace for receiving A TRIP for ONE agency person and a guest. Gee, thanks. I became an independent to produce the kind of book of business that I wanted, not the regional vice president of a cluster or the regional rep of a carrier.
John brings up an important concern of Independent agents: the possibility of losing access to individual production reports and incentive contest qualification. While these are not issues with members of United Valley members due to our member criteria and focus, clustering can obscure and dilute the contributions of individual agency members, possibly diminishing the rewards for growing and successful agencies. So what do you other agency owners believe: does cluster membership help or hurt the essential 3-way relationship between policyholders, agencies and carriers?