Page 120 - The UnCaptive Agent

INSURANCE CARRIERS 93

agents make more money (though we do, of course, do
this). We also provide development and coaching for
our members at all phases of their agency’s development,
from startup to final exit. One of the things franchise
business operations are justifiably proud of is that they
have a very low failure rate because of standardization
and coaching. Agency development organizations like
OAA aren’t franchises. Our member agencies use their
own names, business models, and processes. They are free
to do business however they want to, but we are there
to assist them with training, education, best practices,
coaching, mentoring, and access to carriers at the level
previously reserved for large national agencies.
While Market Access Providers (MAP) and clusters
are generally unpopular with insurance companies,
Agency Development Organizations (ADO) have
earned rave reviews from carriers because their agen-
cies create much more organic growth for them, better
retention, lower loss ratios, and less volatility due to the
services they provide.
Profit-sharing can be as much as ten percent of
agency revenues, and in many cases, represents the
profit of the agency each year. Since volume has such a
disproportionate impact on the percent of premium the
bonus represents (ranging from .25 percent to as high as
ten percent or more), many agencies—including many
larger agencies with as much as $10 million dollars in
annual revenues—find it financially attractive to become
members of Market Access Providers to increase their
profit sharing results.
Regardless of whether you receive profit sharing, it’s a
sound principle of agency management to never budget
profit sharing or bonus income in your annual business
plans. While it may be difficult to make an adequate
agency profit without profit sharing, you should plan to