Many insurance agencies out there could potentially stand to benefit enormously from becoming involved in an insurance cluster.
You might want to learn more about this type of arrangement if you're looking for ways to network with others in the insurance industry and take advantage of new resources that can help you optimize your business.
The following are five important things to keep in mind if you're interested in insurance clusters and you're looking for ways to improve your insurance agency's operations:
1. An insurance cluster is an alliance or affiliation between a group of different insurance agencies.
Insurance clusters are created when individual insurance agencies come together to take advantage of the various group benefits they can offer one another by working together in a team. Insurance clusters are also sometimes referred to as insurance networks, alliances, or aggregators.
2. Those involved in an insurance cluster work together to support one another.
Members of an insurance cluster will typically work together to overcome the mutual challenges that they face. Some examples of tasks that member agencies often help one another with include marketing, handling payroll processing, and group bargaining with insurance carriers.
3. Individual members of a cluster continue to operate independently and are not merged with or acquired by other entities.
Although member agencies work together, they still remain independent and autonomous. A cluster does not involve any mergers or acquisitions.
Cluster members continue to make their own decisions and don't have any control over one another. They enjoy the mutual benefits the cluster provides.
4. Cluster setups allow individual agencies to target their endeavors toward more specific goals.
One of the key challenges in the industry that insurance cluster membership helps agencies to deal with is the multiplicity of tasks that an agency must handle when going it alone.
Member agencies of clusters can pool their resources and allocate particular tasks to particular members so member agencies can focus on what they're best at.
5. Clusters vary widely in terms of how they work and how closely individual agencies within the cluster associate with one another.
Cluster arrangements in the insurance industry vary widely. While some clusters might offer features like shared office space or personnel, other clusters keep more distance between member agencies. Every cluster is free to negotiate its own terms with the vendors and carriers it works with.
Individual insurance agencies interested in taking advantage of the resources provided by joining a cluster should carefully research individual clusters to fully understand what they offer and what membership involves.