Hey everyone! Today I’m going to talk about a controversial topic with the captive and independent worlds and agents. I really want to talk about why captive agents are not really free, and I’m gonna just address it straight up with the captive versus the independent world, so let’s dive into it!
The main reason I’m talking about the captive agents not really being free, versus the independent who is truly free in the insurance world. The main reason for that is when you’re a captive agent, you’re at the mercy of one company. I’m seeing it happen in real time right now with these changes going on with insurance companies tightening up and down and recession hitting. When you’re at the mercy of one company, all your eggs are in one basket. So if that means they decide to change the structure of commissions, renewal commissions, eligibility of the carriers, or any change really, you are completely screwed. Everything depends on that one company in comparison to an independent agent who has the variety and the diversification of all the different companies out there. I’m not tied to one company, but obviously I go with the market in the industry, so we’re all at the mercy of that no matter what- whatever happens to the industry happens to every agent. At least I know that if (let’s just say) Liberty Mutual just blows up I’m not going down with them. I got 12 to 15 other companies that were writing and we have in place to make sure that we have that security.
I’m watching it happen to some people I respect and really admire in the captive industry and it’s unfortunate like I feel for them, but at the same time it’s like hey man there’s certain measures you can take and you have to take accountability. When you’re captive you take the benefit of having that big brand name behind you because that’s what you’re basically paying for when you’re getting those commission cuts and having that big brand name behind you. Versus going off and starting as a little Adelfia because nobody knows who that is.
If you’re making that decision on going independent versus captive, consider that because of the freedom and the flexibility that comes with the true independent agency that’s truly not tied to one company and is not dependent on really anyone. That’s true freedom in my opinion. There’s trade-offs for sure, like you don’t get to start off with the with the book of business that they hand you, or that big brand name like Farmers, State Farm, Allstate, etc. They have a foot up on everyone because they have the solid name behind them, they already have billions of dollars pumping into their marketing on Super Bowl ads and stuff like that so they get that first leg up. But then when problems hit, there’s trade-offs. Honestly for me I love the freedom, I love where I’m at, these are moments where I’m pretty stoked that I don’t care what this company does I’ll just move it to another company.
The truth is for captive agents that if you’ve already built a massive book, it’s super hard to get it out of there and move it to somewhere else, like I don’t know if there’s a way to do that I think you just have to ride that train. For example State Farm agents don’t even really own their book of business unfortunately, Allstate agents I think they just saw a huge commission cut on all their renewals, like that sucks! And that could totally happen with some of the companies that we work with too, but like we still have a variety of other companies like I said.
Of course, there’s a lot of upside potential because they’re all great solid companies. You’re really selling great products, but you gotta deal with the nonsense. I know for sure State Farm is super restrictive like if I posted this as a State Farm agent I’d be screwed. I can’t be posting on YouTube, TikTok, Instagram, etc. I think that’s ridiculous like that’s the world we live in so if you’re stuck and you’re at the mercy of one company you should really reevaluate your freedom. I just wanted to put this information out there for anyone who is working on making that decision because this is the hard truth that people don’t tell you about. That’s all I got, see you all soon, peace!