How does an insurance aggregator work?

An Insurance Aggregator, for the purpose of our discussion here, is an entity that combines or aggregates the premium of a group of Independent Insurance Agents in order to receive benefits that are greater than could be obtained by the individual agents or agencies. This is primarily done to obtain the higher levels of commission, incentives, or profit sharing that insurance companies (carriers) offer to larger agencies vs. smaller agencies.

It sounds like a great idea, right? Pool premiums together to gain additional benefits. However, with most Aggregators, that is really all they are doing. They lack control over their agents with regards to risk selection, a key element to achieving profitable results. Then results turn poor for the entire group and then each agent suffers the consequences of reduced profit sharing or none at all if the group misses the qualification levels.

At SIAA, we take a different approach. Yes, we do reap the benefits of aggregating premium (we are over $9 billion in Property & Casualty premium) which gives us the opportunity to negotiate some amazing profit sharing and incentive deals the smaller guys just can’t obtain. Additionally, we have a book management approach which helps guide our agents to writing and retaining more profitable business, thus gaining greater benefits over the long haul.

Contact us today to learn more about how we can help you grow your agency.

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