Independent agencies have all kinds of decisions to make when they are starting out. Among those decisions are whether or not to join a network, aggregator or cluster—a third-party organization that enables a small or new agency to the meet volume commitments imposed by many carriers and participate in profit sharing.
“If you were an independent agency just starting up, based on the volume commitments you’re held to, you may only be able to represent 2 or 3 companies. As a PIIB affiliate, the commitments are significantly lower allowing you to represent more and as a result, hold a more competitive position in the industry.”, explained Tracy Ryan, who handles marketing and agency relations at Pacific Interstate Insurance Brokers (PIIB).
PIIB is one of several companies that allow independent agencies to essentially aggregate their business with other independent agencies in order lessen the pressure of weighty volume requirements and more importantly, be able to offer clients more choices.
“The main components that sets PIIB apart from similar organizations include but aren’t limited to; the cost, the direct access and profit sharing. Every agency, regardless of the size or how long they’ve been in business, pays a flat fee of $850 a month. The flat fee allows an agency to budget what they can expect to pay their cluster. In addition, PIIB takes zero commission and it’s paid directly from the company to the affiliate. PIIB’s direct access model means no central marketing which can often lead to a bottleneck effect getting quotes turned around. The agent always goes direct to the company and never submits business through PIIB.”, she added.
Lastly, she said profit sharing is a way in which joining an aggregator can really pay off for new agencies. She stated that PIIB only keeps 10% of the profit sharing and returns the other 90% to the affiliates. An independent agent on their own might fall short of the threshold required to receive profit sharing or have one shock loss that makes them ineligible. She said that being part of PIIB, affiliates can count on being paid on all eligible premium every year, making for excellent security in profit sharing.
