Page 113 - The UnCaptive Agent

86 THE UNCAPTIVE AGENT

insurance company, and the independent agent, who
can represent many.
It may be the reason that you’re considering starting
your own independent agency. But even if you have
developed your career up until now as an independent
agent, it’s clear that choice for your clients is a criti-
cal point of competitiveness for you. In this chapter,
we’re going to talk about a lot of things related to these
choices, including the care and feeding of insurance
companies.

How Many Mouths Can You Feed?

To begin with, though, let’s ask the question, “How
many insurance carriers do you need in your agency?”
If you don’t have enough companies, you won’t be able
to take care of all your potential clients—and you won’t
be able to offer competitive products to all the prospects
you would like to sell to. Therefore, principle agents
tend to seek and accept appointments from as many
insurance carriers as they can … at least they do early
in their career, until they learn how expensive it is to
maintain insurance company relationships. Many new
agents end up contracting with a lot more insurance
companies than they really need to. This often leads
to getting fired by some of those insurance companies
because they don’t produce enough business.
If you’re new to the independent agency industry,
don’t be like a kid in a candy store, taking contracts
from every carrier that offers one to you. According to
the IIABA’s 2018 Agency Universe Study, the average
small insurance agency (which they define as an agency
with $150,000 or less in annual revenue) has 11.4 insur-
ance carrier relationships, including 6.3 personal lines
contracts, three commercial lines contracts, one bond