What to consider before joining an insurance aggregator

As an independent insurance agent, perhaps you have considered joining an insurance aggregator or agency network; in other words, an association consisting of multiple insurance agencies and which offers support and benefits to its members.  These groups, also known as insurance clusters, can vary greatly from one to the next.  Some cluster members share office space and staff while in other groups, the members all work remotely from each other.

Each insurance cluster is also free to negotiate its own arrangement and commission schedule with the carriers.  And these associations may draft their own membership agreements, adding such terms, conditions, and fees as they see fit.  As you might imagine, there are both pros and cons to joining an insurance cluster, and we’ve listed some of them here:


  1. Access to Multiple Carriers At Once

    If you work with more than one insurance carrier, you can offer your clients more choices in finding the best coverage at the best price.

  2. Access to Higher Commissions

    When you join an insurance cluster, you may enjoy higher commissions than you might have negotiated alone.  This is because many agency groups do the deal-making on commissions so that their members may enjoy the higher rates reserved for only larger agencies.

  3. Access to Cutting-Edge Agency Management Software

    You may be using paper files or a rudimentary spreadsheet to manage your client information.  But insurance cluster membership might grant you access to sophisticated agency management software.  Many of these software packages allow you to manage your entire agency in one place, streamlining administration, management, commissions, business development, legal compliance, and more.

  4. Access to Other Business Support

    Your group membership may include other support for your agency as well, such as payroll services, marketing, management consultations and business mentoring.

  5. Possible Path to Mergers

    Are you considering a formal partnership or merger with another insurance agency?  Joining an insurance cluster can be a way to gradually explore this option in a mutually advantageous way.  As a member of a cluster, you get to know other agents, what they are like on the job and what they might be like as official business partners. Often, it will be much easier to part ways with an insurance cluster than a merged company.  Joining a cluster can give you and others a chance to test the waters and see if a merger or other business arrangement would be a good future step.

Now that we have looked at several upsides of joining an insurance cluster, let’s examine some of the potential pitfalls.


1) Beware of Fees – Understand The True Cost of Membership

  1. a) Start Up Fees. Before joining an insurance cluster, take a look at their start-up fees. Some groups even charge thousands of dollars in initial dues.
  2. b) Monthly Fees. Next, find out whether the group charges any monthly fees and how these fees are paid. Do you pay a fixed fee or are the dues taken out of your commissions?
  3. c) Maintenance Fees. Then, does the group charge maintenance fees for support and benefits enjoyed by all group members, such as software, accounting, advertising, legal services, and more?
  4. d) Exit Fees. Finally, does the group charge an exit fee? This fee may be substantial, especially if the cluster strongly discourages member turnover.

2) The Damage Caused By Group Attrition

Speaking of member turnover, this is another potential downside of joining an insurance cluster.  When members leave, especially if they take books of business with them, this can be detrimental to the group.  The damage can be lasting or even permanent as the remaining members scramble to make up for the lost income and increased expenses resulting from the member’s departure.

3) Lack of Management Skills

The success or failure of any group depends heavily upon its leadership, management, and teamwork skills.  If an insurance cluster is lacking in these areas, this does not bode well for its members.  The member agents might have worked on their own for a while, become set in their ways and are no longer accustomed to working as a team.  However, teamwork is necessary if the group is to succeed.  The group should be able to identify its leaders, who can then assign management/support roles based on each member’s strengths and weaknesses.

4) Does the Cluster Have the Necessary Clout With Insurance Carriers?

First, you should ask about whether the cluster members have established relationships with the carriers and how strong those relationships are.  Does the cluster have contracts with carriers?  Do the carriers need to approve of each new member who joins the cluster?  Carriers may reject certain clusters whose members do not have existing relationships with a carrier, or whose books of business are not large enough.


As you can see, there are many financial considerations which go into the decision of whether to join an insurance cluster.  In joining such an association, you would also be placing a large part of your livelihood in the hands of others, so you want to find a group of people you can like and trust.  Take some time to investigate different groups, sit in on their meetings and have your questions answered before you decide.  Still, have questions about whether you should join an insurance aggregator or agency network?  Please contact Agent Support Network of America (ASNOA) today so that we can help you make the best decision for you and your financial future!

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