• Chris Hill

How Many Carriers Do You Really Need?

I come across the following scenario often: A career captive agent is making the decision to ‘go independent’ and is looking for the group that can offer the most carriers. They have spoken with several organizations and want to know how many carriers they can have access to through our group.


My short answer in this situation is: ‘ISG United offers 36 different carriers.’ My long answer is something I would like to share below and is very different from the approach many groups, or more specifically, recruiters for those groups, take when trying to attract new members.


"It can truly be a logistical nightmare to keep track of multiple carriers and multiple carrier systems. "

More carriers do not guarantee more success or efficiency for an insurance agency and its producers. Sometimes, more carriers just mean more problems. When moving from an environment where an agency owner only needs to be concerned about ONE carrier with ONE set of underwriting guidelines and ONE software system with ONE set of operational protocols, perspective is crucial. It can truly be a logistical nightmare to keep track of multiple carriers and multiple carrier systems.


Be sure to think from a business management perspective just as much as from a ‘closing ratio’ and retention perspective. It is extremely difficult and can be a waste of your staff’s time to try and keep track of the login to that ‘one-off’ carrier to service only a handful of policies.


The Ideal Number of Carriers


Although different for everyone, in my experience, agencies settle in with four to six ‘core’ carriers where they write the majority of their business. These are carriers that are consistently competitive in their target markets and usually provide profit sharing opportunity and business-building resources. These carriers usually account for 80% of the overall book of business. Then there are an additional four to six ‘secondary’ carriers that provide more specific product sets for a portion of an agency's book. An example here would be a flood carrier that specializes in making flood transactions easy and may provide both NFIP and private flood platforms. OR a stand-alone carrier that provides jewelry and art coverages on a stand-alone policy.


In the end, most agencies can efficiently manage between ten and twelve carrier relationships without overtaxing their producers and staff. Finding these carriers for your agency is a different task altogether but this is a service that a good group should help provide when starting an independent agency. After asking questions about your customer market, they should be able to help provide a shortlist of carriers that will help you succeed.


More carriers do not guarantee business success. Over time, you will find those carriers that work best for you. When you focus on building relationships with those carriers, efficiency and revenues will skyrocket!