Page 114 - The UnCaptive Agent

INSURANCE CARRIERS 87

and surety contract, and 2.8 life and health contracts.
Actually, most of the time, those small agencies only
represent about nine carriers because those nine provide
some mix of personal, commercial, surety bond, and life
insurance products.
I think that, for the brand-new agency, six is too many
companies. Every carrier that you represent costs you
time to manage the relationship. It costs you more time
to understand their products and their unique market
position. It takes even more time to learn their systems
and how to operate them effectively. In the beginning
of your business, this is time that could be better spent
on prospecting and being in front of potential clients
and current clients. Our company, with experience help-
ing over two hundred fifty agencies start from scratch,
believes that beginning with three or four high quality
carriers is a number that most agencies can grow very
rapidly with.
Some agents make the mistake of trying to sell insur-
ance to every single opportunity they come across. When
they make that mistake, they do need a lot of carriers
because they are trying to serve such a broad clientele.
A much more successful strategy is to think of your
agency like a retail store where you target clients for
the products that you stock instead of trying to stock
products for the entire marketplace.
As you grow, you can support more insurance com-
panies. And you’ll have a need for more insurance
companies, because your market presence will also grow.
According to the same Agency Universe Study, the aver-
age medium-small sized agency (which they define as an
agency with revenues between $150,000 and $499,000
per year) has contracts with thirteen companies across
all lines. This includes six personal lines carriers and five
commercial lines carriers. The average medium-sized