Insurance Aggregators or Insurance Clusters–What’s Right for You?

  • Melissa Smyt
  • August 10, 2020
  • OLI Insights

Insurance Clusters vs. Aggregators – Why OLI is Not Your Grandma’s Aggregator

If you’re like me… then you started your insurance career by accident. I was recruited by a headhunter to come work for a top national brokerage house. To set the stage, at that particular time I only carried the required auto insurance. I began with nothing, got licensed, and started to build a book. In three short years, I amassed over 35 large commercial clients totaling nearly $3 Million in insurance premiums.

Melissa speaking from the stage

I spent the next 5 years continuing to build my book, mentoring new producers, growing an office. I traveled, earned my Certified Insurance Counselor (CIC) designation, made many friends with carriers and colleagues in the industry, and thankfully, I worked with some really amazing clients. Then I had the opportunity to give back to the insurance industry in a revolutionary way. We started OLI Insurance Services, Inc., an insurance aggregator quickly becoming one of the top insurance aggregators in the industry.

An Insurance What? You May be Wondering, What’s an Insurance Aggregator?

Traditional and outdated definitions state that “Aggregators are simply comparison shopping sites–like kayak.com for insurance. They allow consumers to easily compare product features, carriers, coverage and price (InsuranceThoughtLeadership).”  

However, I argue that insurance aggregators and insurance agency aggregators exist to better serve the independent brokerage community. In most cases, their core offering is direct or indirect market access to insurance carriers that an agency otherwise may not have been able to contract with.

"In other words, an effective insurance aggregator is a success partner bringing in new business and opportunities in ways you never thought possible. "

Are Insurance Aggregators the Same as Insurance Clusters?

Not exactly… Insurance clusters are a group of agents who form an association or joint venture to aggregate individual books of business with common carriers. The purpose is to create lucrative contingencies as well as increased influence and resources observed with other economies of scale. A successful insurance cluster requires familiarity and mutual respect among cluster members, recognized and agreed upon responsibilities, expense sharing, and decision-making (IIAT).

Imagining I was going to start an insurance agency, I thought about the “arrows” I would need in my “quiver.” Yep, market access is definitely top of mind. How else am I supposed to shop multiple carriers to ensure my customer is getting the most comprehensive coverage at the best rate available? A major challenge for insurance brokers is obtaining market access. The carrier will have you apply and interview for an appointment. And, even then, the insurance carrier will only appoint you once you’ve committed to a certain premium volume in a specific time period.

It’s the equivalent of offering your first born!

Burnout, Unfair Commitments, and Embarrassment, Oh My!

As an agency owner, you need a multitude of markets to capture the risk profile of your opportunities, but you’re probably weary of overextending yourself? If you don’t meet your carrier commitments, there’s a strong chance the carrier will revoke your appointment. Wouldn’t that just spell e-m-b-a-r-r-a-s-s-i-n-g? 

But that’s not all. 

I realized my immediate success was tied to the support and resources offered by my brokerage firm. We had vast carrier appointments, I had mentors to help me with new leads, guidance on which carriers I should submit to, sales and marketing resources, account managers, and risk management tools. 

What if we could bring all that and more together in a solution for the independent channel? 

Melissa behind the booth of OLI Insurance Services

A fusion of the market access associated with traditional insurance aggregators paired with the benefits of insurance clusters, sans the drama. An agency’s success is a combination of key market access, efficient processes and procedures, talented staff, cross-sell capabilities, and mentorship. 

And the structure of OLI was born.

As an Insurance Agency Aggregator, What Can OLI Provide?

We like to say at OLI we are your go-to Agency Partner, which means we provide every Affiliate with a white glove, concierge-level of support. You have the ability to grow your agency, leverage carrier relationships, perpetuate your agency through a merger or acquisition, and innovate your productivity and efficiency through our unique partnership. 

Essentially, you own your own book of business, and get to remain completely independent while also getting: 

  • Direct market access for P&C carriers.
  • Outsourced fulfillment for coverages you don’t offer (Life Insurance, Employee Benefits, Commercial, and Personal).
  • Task assistance or even outsourced account managers to help manage the day-to-day.

Yes, we’re not your Grandma’s insurance aggregator. 

Group photo of OLI Insurance Services

Have questions or are looking for other solutions for your agency? Contact us today to learn how we can partner with you to help you achieve your agency growth goals.