Today's Viewpoint: A MarshBerry Publication

Insurance Aggregators are Evolving for Independent Agencies

As agency consolidation continues to reshape and repopulate the insurance distribution landscape, so must the role (and perception) of insurance aggregators if it intends to deliver value to its participants and carrier partners.

Your agency is akin to a living, breathing entity, created to grow, and it’s driving motive is to not just survive but thrive in this ecosystem. Like any living organism, an organization pulses with life and wants to flourish. Like every business, competition drives some of these entities or categories within the environment to extinction. And sometimes these same pressures can be the catalyst for both evolution and innovation. Charles Darwin defined evolution as “descent with modification”, the idea that species change over time, give rise to new species but share a common ancestor.

In the current insurance ecosystem, local or regional clusters, and the majority of national aggregators, remain focused on three primary functions: carrier compensation, market access, and agency relevance. This is the ‘common ancestry’ of every entity within the category of insurance aggregation. To advance beyond simply surviving, new variations are emerging that go beyond the basic table stakes to not only attract and retain participants but to help them grow and prosper well into the future.

MarshBerry’s FirstChoice is Leading the Way for This Next Generation of Aggregation

The category of aggregation has grown in popularity and scale, therefore creating new variations and species as they all make an effort to differentiate, grow, and thrive in today’s marketplace. In fact, in 2018, MarshBerry projected that around 85% of independent agencies in the U.S. will be part of a network or aggregator by 2023. With profitability pressures mounting in some areas of the insurance industry, this estimate is likely to become a reality.

While some agency partnerships are expanding for a variety of underlying issues, most of the offerings fail to provide highly valued resources, or intellectual assets that allow independent agencies to scale their business or better compete with local or regional competitors. Some remain stagnant and satisfied with short term and /or marginal growth. Few focus on the most important ingredients (talent development, insurance competence, financial stewardship, and agency differentiation) that propel an independent agency forward.

Agencies that want to remain independent and keep their identities must have access to an underlying infrastructure that provides expertise and business solutions that stand the test of time. Resources that have both expanded and direct carrier access, provide enhanced compensation models, offer education and development and optimize efficiencies through technology. In order to avoid extinction, agencies must be willing and able to re-invest in itself and partner with professionals committed to delivering value to its client base. The FirstChoice agency aggregator combines the resources of the MarshBerry Platform and First Choice Agents Alliance to offer independent agencies an evolved  infrastructure made for them.

If the agency partnership you are considering (or currently participating in)  is taking more than its fair share from you or must rely on contractual restrictions that burden both your short and long-term growth, you owe it to yourself to reassess these offerings.

Agency Relevance Must Become the Most Essential Resource an Agency Partnership can Offer.

Agency relevance (the leading value creator) must become the most essential resource an agency partnership can offer its audience, so its carrier partners can quickly understand the underlying area of focus for this same heterogeneous group. Natural selection is forcing aggregators to specialize to survive. For some it may be their willingness to help new agency start-ups. For many, they may be relegated to firms looking to play out the stretch as their agency ownership drifts from year to year, not yet ready to deal with internal succession or the right time to sell. Others will adapt by using their model to acquire these same subscribers, aimed at retaining premium volume at a potentially below market, hometown discount. And then others will focus on supporting their membership to remain strong and vibrant individually but relevant and sustainably productive collectively.

Re-Imagining the Role and Responsibility of Aggregation

No longer should sleepy agency participants benefit from the hard work of their more committed, conscientious contemporaries. Firms looking to scale their business, or better compete with local or regional competitors, need vetted, technological investments focused on delivering sustainable growth and business intelligence  to adopt these essential tools in their individual firm’s evolution. Can your agency partnership offer this to you today?  

If you have questions about Today’s ViewPoint or would like to learn more about  how aggregation programs can help you deliver enhanced value to your insureds and carrier partners, email or call Keith Captain, President, at 704.831.8708.

Contact Keith Captain
If you have questions about Today's ViewPoint, or would like to learn more about how MarshBerry can help your firm determine its path forward, please email or call Keith Captain, President, at 704.831.8708.

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