Page 21 - The UnCaptive Agent

in personal insurance, began to encourage them to more
freely appoint agencies to represent them, believing as
they did, that the agent’s historical role of front-line
field underwriting was no longer necessary.
Our success, coupled with carrier actions and the
increasing desire of independent agency insurance com-
panies to increase their market share in personal lines,
led to imitation by other entrepreneurial companies
seeking to copy our success. Today, as I write this early
in 2020, there are dozens of companies throughout
the country operating as market access providers. And
according to the Conning report “Property-Casualty
Distribution – Evolution, Not Revolution,” vii pub-
lished in 2018, approximately twenty-six percent of all
independent insurance agencies have joined an agency
network or aggregator.
Agents have joined organizations like ours not just
to facilitate the startup phase of their business, but to,
in Conning’s words, “punch above their weight.” The
advantages of being a part of a larger business model
creates greater and easier access to carriers (market
access) and potentially greater compensation due to the
ability to write more customers and access profit sharing
and other financial benefits traditionally enjoyed only
by larger agencies.
The rise of these phenomena in the marketplace
has benefited virtually everyone, apart from exclusive
agent and captive agency insurance companies. These
carriers, with their higher costs of distribution, have
seen a steady flow of agents leaving their ranks due
to compensation reductions (made as their employers
have sought to remain competitive in an increasingly
price-sensitive personal lines market) and entering the
independent agency force with a corresponding flow of
premiums to the IA channel.