While there are many positives to joining a network or aggregator , the aggregation of premium can also have potential negative results as well . For example , your group loss ratio may result in no profit sharing with a company you represented when your book of business was profitable , and you would have received a check with your individual contracts .
Joining an aggregator or network is not free — some may charge 1 % - 2 % of annual commission to be a member . Depending on the structure , this may have to be paid upfront and may or may not include contingency commission . Some aggregators may require each agency to pay a percentage of their profits to be a group member . There are probably as many funding methods as there are aggregators .
It is also important to consider the on-going agency ownership structure . Some aggregators / networks may become the owner of the agency member , so you will need to decide if you are willing to reduce your ownership in the agency . You ’ ll need to understand upfront the requirements for leaving an aggregator / network along with the financial implications . In addition , depending on the agreement , an agency owner may lose some or all
management decisions of their agency .
Lastly , some aggregators may require partner agencies to be on the same agency management and / or rating software system . If you are on one system and have to change to another , that may be a sizeable expense . It can also result in mass confusion and unhappy CSR ’ s who have become comfortable with one program .
At the end of the day , only you can evaluate if joining an aggregator / network makes sense . Each network offers differing value propositions , cultures , and contractual obligations . KAIA is happy to consult with you and connect you with other members who have made similar decisions and may be a resource . Just remember that joining an aggregator / network is not a substitute for being a member of KAIA . At the heart of their mission is protecting and promoting the value of the independent agency system which we all need to support .
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