As the market for insurance changes and the consumer has more and more choices of what to buy and where to buy it, the small agent is at an increasing disadvantage. The reasons are lack of capital to invest, lack of knowledge in how to invest in competitive capability, and decreasing relevance to insurance carriers (as they are increasingly able to drive business through other channels).
In the past several decades, the organization I am affiliated with, SIAA, served to provide access to markets for small agents. While that is still important, we at OAA and SIAA recognize that agents have an increasing need to band together to understand and address the coming challenges.
For example, in a world of commission cuts (which are becoming and will be relentless), who will fare better an agency of $10 million of premium and 2% growth or one with $7 billion and 15%? Who has a better future – the agency with 6 people to figure it all out or one with hundreds of brains?
Agents have always banded together to improve their opportunities, and the future demands this even more than the past. There are many groups seeking to fill this need, but most still only offer markets. If this is the extent of their vision, that represents a pretty scary boat to get into in rough seas, but a large, forward looking organization with access to capital for development, commitment to creating answers to our challenges, and increasing relevance to insurance carriers is going to be much more important in the future than in the past.