Insurance carriers are tightening their grip on agency relationships as the market grows tougher. No longer are carriers easily wooed by interest alone. Instead, they now set firm rules and expect agencies to prove their worth before partnering up.
Joseph Totah, president of Strategic Agencies—the parent company of AgencyEquity—explains that carriers want agencies that meet their specific needs. “You don’t just ask for a carrier and expect them to say yes. You have to convince them to want you,” he said.
Smaller and mid-sized agencies face more hurdles in securing appointments directly with carriers. Many are turning to agency networks as a middle ground. These networks can connect agencies to carriers they might not reach on their own, as carriers appoint the networks, which then provide access downstream.
Totah advises agencies to focus on a few select carriers rather than chasing volume. For personal lines, he suggests aiming for no more than two or three carrier partnerships. For commercial lines, a slightly larger number makes sense. Carriers want agencies dedicated to them, submitting enough business to meet expectations, not agencies spread thin across many relationships.
Trying to win clients solely by offering lower prices won’t work anymore, Totah warns, as carriers are losing money and unwilling to tolerate that approach.
Smaller agencies should be realistic about their power when dealing with carriers. “Picking and choosing doesn’t usually work for smaller players,” Totah said. Networks can help bypass some size-related barriers, but these networks must themselves be sizable and credible—often requiring a hundred or more agencies to gain carrier trust.
These networks differ in what they offer. Some simply provide carrier appointments, while others supply full support, including technology tools and errors & omissions coverage. Agencies can choose what fits their needs, from basic appointments to complete operational help.
Some agencies find carrier service centers useful, especially if they want to boost sales without adding staff. But these centers come with costs, as carriers reduce commissions to cover their fees. For agencies that prefer personal, hands-on service, especially those catering to high-end clients, managing everything internally might be better.
Despite the hard market slowing the shift from captive to independent agency models, Totah expects the trend to pick up again soon. Many agents start in the captive world but find its limits restricting. Moving toward independence offers more freedom and broader product ranges.
Technology offers promise but also confusion. Totah says many agency owners feel overwhelmed by the flood of new digital tools. Artificial intelligence, in particular, hasn’t taken off quickly. He believes AI needs to be part of a bigger system to catch agencies’ interest.
Overall, the insurance agency landscape is changing fast. Agencies now must be focused, committed, and realistic about how they work with carriers. The era of easy access is over. Instead, agencies must prove their value to earn and keep carrier trust.