As a captive insurance agent, it’s only natural to wonder what it’s like to work on the independent agency side. Our opinion? It’s much better, and here’s why.
Higher commissions. In the independent agency world, average commissions range from 5-8% higher. This data comes from the thousands of captive direct writers I have spoken with over the last 10 years.
Flexibility in carriers. Worried about running into your neighbor at the mailbox or perhaps seeing a family member at Thanksgiving because you know they just took another big rate increase? You are NOT alone! This is a direct comment from one of our former captive now independent agency owners. Are independents immune to rate increases? No way. The beauty, however, is you have many other carriers to move business to if a carrier decides to take rate!
Flexibility in selling. Tired of having life insurance production requirements tied to your commission and bonus levels? As an independent agent, life insurance production is gravy commission. If you want gravy commission you are free to pour it on. If you don’t, say no thank you and focus on property and casualty production. Life insurance production is totally up to you as an independent agency owner.
Better retention. What’s wrong with this picture? You are “growing” at 10% per year and you are “retaining” 80% of your customers. It’s a trainwreck waiting to happen. Not only do independent agencies retain above 90% of their customers but they also have a closing ratio of over 70%. This is because they have many more carriers. Ask yourself, how many new prospects do I sell out of 10? Is it 1, 2, 3?
Bonuses. You get bonus money on top of your commissions‒ independent agency owners range upwards of 9-10% additional. Think about that as an effective rate of commission of 25%! We have not seen those levels of commission since Ronald Reagan was in the White House!
Be your own boss. No one enjoys a district manager hammering them every month for improvements, additions, or money. Being an independent agent allows you to be your own boss and not have to worry about someone else looking over your shoulder all the time.
Control over your brand. Retirement should be a time of happiness; a time you reap the benefits of all the hard work, dedication, and at times, sacrifices you have made over many years. Nothing’s more disappointing than handing over the work you did for a company for a predetermined price, or worse, for free. As an independent agency owner, your company is YOURS, and before retiring, you can sell it on the open market to a high bidder.
Seems like a no-brainer to us. MIAA is dedicated to helping you make the transition from fed up captive agent to a satisfied, successful, and most importantly, happy, independent.
Written by Josh Nordin https://www.linkedin.com/in/joshnordin