Impartial brokers ‘are usually not dinosaurs’; they’re probably the most beneficial a part of the chain
“We are excited to officially welcome so many new agents to Renaissance in early 2021,” said Kevin Callahan (pictured), chairman and CEO of the Renaissance Alliance. “2020 has been a challenging year for everyone, but our alliance will be further strengthened with the addition of these forward-thinking, growth-minded agencies. We are now quickly approaching a P&C premium of $ 1 billion. “
If anyone is an independent agency attorney, it’s Callahan. In building the Renaissance Alliance and expanding it to new states, Callahan has remained true to his belief that independent agencies are the “most valuable part of the property and casualty insurance value chain” – as long as they have the scale, skills and capital (three key elements by Renaissance) to stay relevant to consumers today.
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“Much of the world that has analyzed property and casualty business for the past 25 years, particularly US private and small businesses, has consistently demanded the demise of the independent agent,” Callahan said. “The independent agent is a dinosaur, the independent agent is ineffective, the independent agent is inefficient. Customers want to be able to do this work right away. So the future is to go straight to insurance companies and use online tools.
“While we believe 100% in the importance of using technology, using the right software, and using data and analytics for independent agents, we don’t believe at all that independent agents are dinosaurs. In fact, we believe the independent agent is the most valuable part of the property and casualty insurance value chain – more important than the carriers and more important than the providers who serve the carriers. “
There are approximately 1,500 property and casualty insurance companies in the United States. State Farm has the largest consumer market share at 4.5%, and the percentage market share drops rapidly from there.
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“Insurance carriers – the risk carriers – are a dozen. They are everywhere. Because of regulation, they mostly sell the same or similar products and their prices are set by government regulators, ”said Callahan. “The real differentiation in this market lies in the independent agency. This is where the customer relationship exists. Here there is trust between the customer and the agent. This is where the client gets the advice they need to best understand how to handle their risk, whether that is their personal risk or the risk associated with their small business.
“Of course, 2020 was another year to underline the value of independent agents, because we are exposed to risks as a country and a world that few really thought about. At Renaissance Alliance, we strongly believe in the independent agent. We strongly believe in technology, software, data and analytics, but we don’t see the independent agent being tossed aside because customers can go straight to those sources. We believe the independent agent must use these tools and continue to build the trusted advisory relationship they have had for decades. “
The Renaissance Alliance’s value proposition is to help Independent Agency Owners increase premium, maximize revenue, and increase agency value through higher profit sharing, guaranteed overwriting revenues, and the relocation of non-revenue generating activities. The net effect is higher revenues, lower expenses and accelerated agency growth.
“There are many independent agents who want to keep their independence. You have been running these companies for decades. Often times, they are the second or third generation to run these agencies, and in some cases they have children who they hope will want to take them over. But the challenges keep coming back to size, skill and capital, ”Callahan told Insurance Business. “Joining our platform gives them the opportunity to gain scalability as they are now one of 117 members currently with a collective P&C premium of nearly $ 1 billion. What they can do from leverage, be it with carriers or providers, is nothing in itself compared to what we can do together. But they still run their own businesses, they all make their own decisions, and they decide how to manage and run their business.
“We also bring them skill. Independent agencies are always very good at relationship management, they’re good at sales, they’re good at building trust, they’re good at giving advice and understanding their product and risk – but they’re not always that good at, too understand what technology they need or how they can implement technology and train their employees. This is what we can bring to the table in terms of skills, whether it is hardware, software or the training that comes with helping the staff in their agencies figure out how to do it. ”