How to Choose the Best Insurance Agency Cluster for You

May 12, 2015
By: Voldico

You’ve made the decision to join forces with an insurance cluster or network, but how do you choose the right one for your agency?

In the insurance industry, an insurance cluster (also known as alliances, networks, and aggregators) is a formal association of insurance agencies established to provide “members” with mutual support and group benefits.

There are many benefits to joining a cluster, including access to carriers, better commission structures, improved profit sharing, and additional resources for business operations. All of these benefits can be enjoyed while remaining an independent agent. 

Once you make the decision to join an insurance cluster, it can be difficult to figure out which organization is best for you. Taking the time to discover which one is truly the best insurance cluster for your needs should be the main goal. 

Factors to Consider When Reviewing Insurance Clusters

There are no two organizations that are exactly alike, so it is very important that you do the research to determine if a particular cluster or network is a good match for your agency. The first thing to do is visit the websites of clusters operating in your state, so you can establish the following:

Is the cluster accepting new members? Many clusters or networks have an open enrollment plan and actively accept and add new members to their group. However, other groups have closed membership enrollment and only offer services to existing members. You don't want to settle on one that you feel is the best insurance cluster for your needs, only to find that you can't get into it.

What are the minimum requirements to join? Some insurance clusters are open to new agents, and others only accept established businesses. Especially if you're a new agent, understanding the minimum requirements can make a big difference in which cluster you try to work with.

What does it cost to join the cluster? Most clusters have a startup fee and monthly payments, which could be a percentage of your commissions, a fixed rate, or a combination of both. Understanding how the insurance cluster charges for membership is the best way to see if a particular cluster fits your financial needs.

What are the biggest benefits of each organization, and how do they compare to one another? Review each website and learn as much as you can about the benefits of each cluster. Cluster agreements vary from group to group. It can be a good idea to create a comparison spreadsheet to keep track of your data and research. You should also review the carrier appointments and determine if those carriers are going to meet your target markets.  

You Have Narrowed Down the List. Now How Do You Choose the Best Insurance Cluster?

You have narrowed down the list to two or three of the best insurance cluster options for you. You'll probably find that they're fairly comparable in benefits and that they're all compatible with your business practices.

So, how do you choose which one is truly best for your agency? There are several ways you can find the right option, and it all starts with contacting the cluster and other members, to see what kind of information you can get, and how your questions are received.

Pick up the phone and contact the cluster directly. Speak to a membership consultant to get a feel for the entire setup and culture of the cluster. You can learn a lot from a phone call, not just in the information you're given but in the way your questions are answered, too. Fit is very important, and it can be difficult to gauge the culture by web presence alone. Sometimes speaking directly to a live person can either put your mind at ease or raise a bunch of red flags. Prioritize your list and start at the top.

Call existing cluster members. After the initial contact, call three to five of the cluster members from your top contender. Stay away from cluster-suggested references, as those agencies are most likely biased and coached on what to say. Look for agencies with similar books and in the same general geographical area as you. Most websites have a list of members, but if your cluster choice does not, you can look up the license on your state’s website to get more information before making your phone calls. 

Speak to principal agents at each independent agency and ask plenty of questions. Find out what they are most happy and least happy with and if they plan to continue their membership long-term. Ask the questions that matter most to you, because other things probably don't matter that much. If an issue with a cluster isn't one you care about, it won't matter if you decide to join that cluster.

You can also do a simple Google search to see if any positive or negative feedback or reviews exist. Be open-minded and cautiously optimistic. Remember people can post anything they want online, so check your sources!

We hope you’ll consider Voldico in your search for the best insurance cluster for your agency. Explore the benefits of joining our network and hear from existing members about their experience.