Captive agents reinventing themselves with independence

The independent agency channel offers numerous business opportunities, from agencies specializing in specific business niches to precisely segmenting target consumers

For decades, the storyline of captive agents reinventing themselves to gain independence has existed. This frequently occurs when captive agents lose their connection to the mothership. Many driving forces eventually create this perception in the captives about to be converted. These reasons can include the captive management not meshing with the agent, the higher-earning potentials in the independent channel, the belief that they could succeed better with more markets, or they have learned enough to be confident to be on their own without the captive carrier’s hooks and handcuffs. However, more than any other reason, the desire to reinvent oneself from captive to independent is often motivated by the profoundly ingrained natural human thought that “the grass is greener on the other side.” Is this a fair assessment? The answer is maybe. Why, perhaps?

The individual seeking to reinvent themselves as independent agents is the truth. So many captive agents take everything they get as a member of a captive organization for granted. Items such as an email address can burden the captive carrier organization to manage. Calling IT is no longer a free service for independent agents. IT support is now contacting a vendor who charges by the hour.

So many decisions become the independent agent’s burden at the independent agent’s expense. Marketing, software systems, selling products and so much more become critical operational decisions that can help or hinder success. This is both a barrier and a motivator for many people seeking independence. To understand the psychology of those frequently looking to reinvent themselves, consider the recruiting efforts of some of the significant captive carriers. These recruitment efforts typically target individuals looking to make life/career changes, those with no prior insurance experience and those with little knowledge of the industry.

Captive carriers provide a compelling story to help newly minted agents succeed. Most people haven’t realized they can be independent agents. However, independence is a frightening prospect for someone just starting out in the industry. There are so many important decisions to make, and most independent carriers aren’t interested in holding one’s hand. These newly discovered insurance entrepreneurs frequently desire the captive path. Moving to independence requires an entrepreneurial spirit—doing so for the wrong reasons can result in many difficulties. However, becoming an IA can be a lucrative opportunity for the right insurance entrepreneur. When an agent becomes a true insurance consultant rather than a company salesperson, agencies almost always see an increase in revenue, bind rate and overall customer satisfaction.

Furthermore, the scalability of an operation is far more critical in the independent agency channel. The independent agency channel offers numerous business opportunities, from agencies specializing in specific business niches to precisely segmenting target consumers. For aspiring insurance entrepreneurs, independence allows true specialization and expertise to flourish.

Another unspoken realization that many people reinventing themselves fail to recognize is that many independent agents act as if they are captives. What exactly is a phony captive? This agency gets over 80% of its premium from a single carrier. In this case, the pseudo captive and their staff become so focused on the products and system of doing business with a single primary carrier that they drive business into one or two main buckets. Despite their independence, they are ultimately branded to a single primary carrier. This is not a wrong way to work, but it has become a reality for many independent agencies.

So, should you reinvent yourself as a freelancer? Is it true that the grass is greener on the other side? If you shook the eight ball, you’d probably see “all signs point to yes.” However, as with any significant business decision, the decision must be made for the right reasons. Also, when contemplating a transition, one must weigh the advantages and disadvantages, create a business plan, seek advice from trusted advisors and other consultative sources, and ultimately do what feels right. This is a significant decision with the potential for life-changing success. So, if you’re starting out and reinventing your business, may your client funnel and business checking account always be complete.