Insurance Networks, Clusters, Alliances & Aggregators... Is There a Difference?

August 14, 2017
By: Voldico

Here’s a hint: the difference is not in the name but in the agreement.

In the insurance industry, agency network groups (also known as clusters, alliances, and aggregators) are formal associations of insurance agencies established to provide “members” with mutual support and group benefits.

The idea of agency aggregation has been around for almost 30 years. It began with some entrepreneurial insurance agencies looking for an organizational structure that could provide greater negotiating strength and increase efficiencies.

The aggregation model allows agency owners to attain sustained growth while remaining independent entities.

As the models evolved, the industry gave the groupings names like clusters, huddles, or networks, and insurance carriers increasingly jumped on board with the idea. As time went on, new structures were born and some existing aggregators created aggregators within themselves.

For insurance carriers, aggregators reduced the number of contracts needed while increasing the number of distribution points.

The pressure for an agency to “get larger or get out” created an environment that fostered the new groupings.

So How Do Insurance Aggregators Differ?

While most insurance agency networks provide increased access to markets, each organization will have differences in other ways, such as:

  • Initiation and monthly membership fees 
  • Profit sharing agreements and contracts
  • And more

The terminology used to describe clusters is inconsistent within the industry. Most allow you to remain an independent agent, and those that do, fall into one of the following groups:

  • Agency Franchise Operations
  • Market Access Cooperatives
  • Agency Platform Operations
  • Managed Agency Organizations

If you think a cluster, network, alliance or aggregator is right for your agency, but you are not sure how choose, check out our post on How to Choose the Best Insurance Agency Cluster for You