insurance networks

Insurance Networks: It’s About Scale

A recently published article entitled “The Future of Insurance Distribution” focused on online insurance sales versus an in-person agent. While this debate isn’t particularly novel, it has recently escalated with the emergence of Insure Tech as an attractive investment sector, and new, more robust online carriers and insurance markets.

Absent from this ongoing discussion are “networks.” At a fundamental level, an opportunity for insurance network scale is provided to agency members. As in any industry, a scalable agency will not only grow, but profits will grow at a greater margin. Again and again, we work with network agency members who have better marketing tactics, robust products and carriers, higher retention, lower loss ratios, better contingencies, and are more tech savvy.  Their overall expenses are comparable or less than industry standards. They make MORE money being a member of an insurance network. Wow! That is scale in action.

The network agency members’ revenues are rising, net margins growing, capabilities and capacity are increasing, and yet, they are not spending more money. That is scale in action.

Many of the leading-edge online insurance providers were challenged by the complexity of the product, customer-acquisition methods, and overall market acceptance. Indeed, there has been enormous progress. At the same time, networks have evolved to provide agents the tools they need to scale and thrive.

Agencies are adapting their operating models to be modern and relevant for decades to come.  Clients and carriers both continue to value the in-person agent. Networks have a vital role in the distribution model. The conversation of the future of insurance distribution is not complete without insurance networks.


Kelly Drouillard is the general manager of insurance lending at Live Oak Bank.

Reach her at Kelly.Drouillard@LiveOakBank or 913-980-7773.