Insurance Networks Evolve to Support Independent Agents
Insurance agency networks have undergone a significant transformation, moving beyond their initial focus on market access to offer independent agents a comprehensive suite of support services, according to industry experts.
These networks now provide strategic growth opportunities, technological assistance, and expanded collaborative partnerships, reshaping the landscape for independent insurance professionals.
Networks have given their members the ability to ‘punch above their weight,’ offering the ultimate insurance customer a broader range of coverage and services they would not be able to offer on their own.
This shift is driven by several factors, including technological advancements and strategic responses to complex industry challenges.
Key Trends Shaping Insurance Networks
Mike Strakhov, senior vice president – agency banking market leader at Westfield Bank, highlighted the trends shaping the future of insurance networks. He emphasized the significance of strategic growth, technological advancements, and increased collaboration. Networks now provide valuable services that go beyond initial offerings, including discounted vendor services and specialized assistance in areas such as accounting, legal, financing, and consulting. They also facilitate partnerships with Managing General Agents (MGAs) and wholesalers, helping agents manage complex risks effectively.
The Insurance Networks Alliance (INA), founded in 2017, has been a crucial player in this evolution, fostering collaboration and driving strategic growth initiatives. According to Strakhov, these gatherings offer a valuable platform for carrier partners to discuss strategic initiatives and provide more comprehensive coverage from each of their individual arms.
Consolidation and Strategic Alignment
Steven Charles Pearson, president of ISU Steadfast Insurance Agency Network, noted how the industry has experienced consolidation. Previously, insurance networks were often loosely structured. In the early 2000s, these networks started to aggregate business, improving underwriting, terms, and access to strengthen the power of individual agencies by enhancing the power of relationships between insurance companies and independent agents.
Pearson suggests that the rapid expansion of networks has slowed since INA’s establishment, with consolidation becoming more prevalent. He predicts a decrease in the number of networks as strategic alignment takes precedence over expansion. He believes that many competitors have been purchased by private equity firms looking to combine organizations.
Technology and Education as Key Support Pillars
The INA also plays a vital role in supporting independent agents through education and the adoption of new technologies. This is particularly important in addressing the challenges of standardizing benchmarks across various network models. Diane Wagner, VP of strategic planning and education for First Choice MarshBerry, explained that the INA has created a dedicated department to analyze new tools, assisting its members in making informed technology decisions.
Wagner emphasized that even beyond technology, networking remains a core element of the INA’s value proposition. She highlights the benefits of networking. The industry’s competitive nature makes scaling difficult for new networks, reinforcing the INA’s commitment to providing education, strategic planning, and networking opportunities for its members.
“Obviously, networking is a slam dunk; our carriers love it because they get to see their biggest partners in one space, and we love it because we’ve just finished strategic planning with them and our members,” she said.
