Secure Market Commitments
Direct appointments with a variety of established carriers that have broad, competitive insurance products to offer is the ideal situation; however, they are very hard to come by unless you have at least a three-year track record and a sizable book of business that you will bring to the table right off the bat. For most start-ups, market commitments will have to come from a combination of a few possible direct appointments and/or a variety of indirect markets such as wholesalers, managing general agencies and market aggregators.
1. Direct Appointments
There are many insurance companies that operate through the independent agency system; however, most will only appoint agents who have some sort of established track record and/or are located in selected marketing territories. As an IIAN member, you also are a member of the Independent Insurance Agents & Brokers of America (IIABA), giving you access to a number of markets it provides.
2. IIAN Associate Members
IIAN Associate Members, as well as many managing general agents and wholesalers are receptive to working with new agents. Many will have little or no volume commitments and are compensated per transaction through policy fees that are passed on to the customer.
3. Market Aggregators
Market aggregators provide assistance to new agents in setting up their first agency office, access to otherwise unattainable markets and niche programs, the opportunity to obtain direct company appointments and a chance to share in the network's profitability. In return, these networks usually ask agents to pay a percentage of commission, a membership fee, or require them to give up a small stake in the value of the book of business built up through the aggregator. Be sure to review the contractual relationship with these entities carefully, especially as they relate to book ownership, commission or revenue sharing and exit costs.