What Is an Insurance Cluster?

August 22, 2019
By: Voldico

Insurance clusters are a great option for many independent agencies. But what is a cluster and why should you join one?

No doubt about it: Networking is important for most businesses. But for insurance agencies, it’s essential. 

Networking is how you learn about potential new leads and entirely untapped or under-tapped markets. It’s also how you learn about industry-related events, strategies, and resources that can help your agency operate more efficiently and grow more quickly. 

Unfortunately, although networking offers lots of benefits, it’s not always easy to squeeze interactive opportunities into an already crowded daily agenda. The good news: An insurance cluster can help.

What’s an insurance cluster?

A cluster is a group or alliance of insurance agencies that join together to provide mutual support and opportunities. It’s like networking, but ramped-up and tailored to the specific needs and concerns of insurance agencies. That means all the members understand your business challenges and “pain points” — and it also means you can work together to find solutions that are realistic, actionable and beneficial — for your agency and for your clients.

Having the help and support of other agents in the insurance cluster can be extremely valuable. Additionally, the interactive nature of an insurance agency cluster is a great way to re-energize your feelings about the work you're doing. It's much easier to get excited about your field and the changes taking place in it when you have others who share that experience. Agencies that join clusters can help their agents find more value in what they do, to better help clients and one another.

Agency owners have to wear a lot of hats to keep their businesses thriving. From managing agents and other staff to identifying leads and markets to performing business operations and managerial duties — and the list goes on. Finding time to manage those obligations while also staying current on changes within the industry is more than challenging — to some agencies, it can pose real logistical obstacles that can interfere with growth and success. As part of an insurance cluster, you can benefit from peer support and other group perks, combining resources with other agencies for both collaboration and financial savings available to larger associations.

Benefits of joining

Many insurance clusters offer the following benefits. However, the scope of these benefits depends a lot on the makeup of the organization. It’s important to do your own research to find the best insurance cluster for you.

Typical insurance cluster benefits include:

Access To More Carriers

As part of a larger collaborative group, your agency can gain access to a wider variety of carriers, which means more products, more options, and greater savings for your customers (and more business for you). What’s more, some carriers may offer larger commissions for cluster members, so your agency can increase its revenue without additional workload. That's a great way to see a better bottom line, while avoiding the additional stress and effort that come with carrier expansion.

Operational Savings

Many insurance clusters pool their resources, sharing consulting services, marketing resources, technology, and in some cases, even staff and office space. That can create big savings for you, and can help you expand your business without all the expense that can come with that growth. Agencies that work with these kinds of insurance clusters have the benefit of additional resource usage, and for smaller agencies that can make all the difference for success.

Profit-Sharing Opportunities

Some clusters offer profit sharing to members, enabling members to garner more revenue than they would outside the cluster. Do your research before joining any insurance agency cluster, as there may be more opportunities with certain groups. While profit-sharing isn't the only reason to select one cluster over another one, the value of it shouldn't be ignored. Over time, profit-sharing could mean significantly more revenue than could be earned otherwise.

Increased Opportunities

As part of a larger group, it’s more cost-effective to explore new markets or new product lines than it would be as a smaller agency operating on your own. Many established agencies find that a cluster provides them with the extra time, energy and resources they need to expand, while new agencies are able to grow faster than they could on their own. For those agencies, joining a cluster can be a winning situation all around.

Independent, only better

Being a member of an insurance cluster doesn’t mean you give up your autonomy as an independent agency. Rather, it provides you with additional benefits that can only be realized by larger groups. 

At Voldico, we offer independent agencies the chance to explore new opportunities, expand their customer base and their offerings, and grow their businesses. To learn more about our premier insurance agency cluster, get in touch.