Page 123 - The UnCaptive Agent

96 THE UNCAPTIVE AGENT

percent. Brokers also charge policy fees in addition to
commission.
Clearly, an agency owner who wants to build a prof-
itable insurance agency will minimize the kinds of
business that must be written in the excess and surplus
lines of wholesale or marketplace. You will want to build
your agency based on standard market business, which
will pay you commissions of fifteen percent or more (plus
profit sharing), as opposed to ten percent (and no profit
sharing). Yet, I frequently see small agencies placing
business with standard market carriers through whole-
salers. This happens even when the agent is writing an
amount enough to get that agency a direct appointment
with the carrier!
Wholesalers and brokers are an important part of the
insurance distribution system. But you should minimize
their use in every way you can. I’ve reiterated that it is
important to have as few, rather than as many, insur-
ance company relationships as are required to write the
business you need to in your agency. This is true with
wholesalers and MGAs as well. That practice allows
you to place more business with fewer intermediaries,
increasing your importance to them.

Relationships Are Important

It’s also true because our industry is a relationship
industry. We build relationships with clients, but we
also need to build relationships with key people within
the insurance carriers and brokers we represent. The
first relationship that you should seek to build with any
carrier is with your underwriter. You want to know that
underwriter personally. And you want that underwriter
to understand you and your agency. You want them to
have a clear understanding of your capabilities and your