Should brokers partner with a general agency or go it alone?
You don’t have to give up your autonomy to get support - you just need to consider a different kind of partner.
Many brokers opt to structure their business as an independent brokerage, rather than work as a captive agent for a single carrier. There are a number of benefits to this approach, including:
- Customization of offerings. As an independent broker, you have the flexibility to customize proposals and plans for your clients, using your knowledge of relevant products and services. Working your own way, you do not have to follow a process imposed by someone else.
- Ability to offer multiple products. Independent brokers have the ability to offer voluntary benefits and supplemental benefits, which allows you greater freedom in meeting your client’s unique needs.
- Autonomy to make your own business decisions. As an independent broker, you can decide the type of clients you want to pursue, how to market to them and how to manage your own business and schedule.
As a broker, regardless of how you operate, the most important part of your business model has been, and always will be, your ability to build a trusting relationship with your clients. This starts with the initial client proposal and includes enrollment and ongoing account support, and especially renewal periods. The power of that relationship cannot be understated and, in order to remain successful as an independent broker, maintaining full ownership of the relationship is key.
However, the speed and complexity of the industry can tempt you to consider going in-house for structure and support. If you have thought about this, you aren’t alone. But you don’t have to give up your autonomy to get support – you just need to consider a different kind of partner.
General agency partnership
One common misconception about general agencies (GAs) is that you have to give up the freedom of independence to work with a GA. The good news is that is not true. In fact, in the relationship, you are the GA’s client. Therefore, it is in the GA’s best interest to support your brokerage in all of these areas and provide you with efficiencies that help you grow your business. The GA exist to support the brokers and meet your needs.
Related: Successful brokers rely on the power of partnerships
From the point of view of your clients, a GA partner is largely invisible. The GA’s services are a tool for your business. What does a GA offer to brokers that you may not be able to do as easily yourself? There are several areas of support GAs provide that can complement your efforts:
- Access to a wider range of products and services. GAs typically work with a broad range of different carriers and each one of them offers its own suite of products. Combined, you can gain access to hundreds of different products that may be difficult to source on your own and stay current with.
- Industry expertise across the insurance spectrum. It is in the GA’s best interests to specialize in one area of insurance. Specialization in employee benefits plans, for example, provides experience that helps the GA point you to the right insurance products for each of your clients and help you better understand each of the products you sell.
- Technology solutions and resources. On your own, investing in technology can be expensive and time consuming. The best GAs in the business facilitate relationships with their brokers through state-of-the-art technology, offering solutions that make managing your book of business more easy and efficient.
- Carrier relations and access. GAs generally have the ability to at least quote, rate, bind and service policies. This gives brokers complete access without having to deal directly with multiple carriers. Brokers work with one GA instead of dozens of different insurance companies, all with different ways of doing business.
- General flexibilities and efficiencies. Perhaps the most important benefit of partnering with the GA is greater flexibility and efficiency. GAs tend to be smaller businesses, making them more agile at any point in time. As such, they tend to be more flexible in responding to market conditions, other influences and most importantly, your specific needs.
What’s right for me?
GAs are efficient in their business practices. Their efficiency hopefully goes beyond their own operations to reach brokers as well. When deciding if the time is right to engage with a GA, there are a few key points to keep in mind:
- Who owns the relationship with the client? When working with a GA, an individual broker still owns the relationship with the client. The GA serves in a support role to the broker and is not client-facing. This ensures that your clients still receive the personalized service they expect from you as a broker, with no confusion as to whom to contact or trust.
- How flexible are my options for servicing business? Working with a GA should not mean that you have to fit your process into a pre-described box. From quoting to enrollment and ongoing maintenance of the client account, a GA should offer integrated solutions focused on simplifying administrative tasks in order to allow you to focus on caring for your clients and new sales.
- What are the fees? A GA partner is compensated by the carriers, so there are no direct costs to the broker or client associated with working with a GA. If costs are involved, the partner you are considering may be another brokerage firm looking to add you to their roster through a revenue sharing arrangement and not a GA.
- What are the cost efficiencies? Another way to look at costs is to determine how you can achieve savings through working with a GA. The most significant selling point for a GA is to reduce your cost structure by offering automation and support technology that makes your job easier and allows you to quote and serve more business.
Working with a GA does not mean you give up your autonomy as an individual producer. The partnership is meant to enhance your business and help you grow, which ultimately allows you to better service your existing clients’ needs and grow your business.
Robert C. Love joined BenefitMall in 2018 as the President of the Benefits Division bringing with him more than 30 years of experience to the BenefitMall team. Love brings experience leading sales and operations teams in all size markets segments on a national level.