As much as people often want to cut out the middleman, there can be advantages to working with intermediaries. In the insurance world, wholesalers sit in the middle between retail insurance agents and insurance carriers, and they can help facilitate policy sales.
Insurance wholesalers are “a type of insurance broker who acts as an intermediary between a retail broker and an insurer, while having no contact with the insured. Wholesale agents place business brought to them by retail agents,” explains the International Risk Management Institute (IRMI).
By working with wholesalers, insurance agents can gain several benefits that can be a win-win for everyone. Even though there can be another layer of fees, working with wholesalers can be advantageous for clients who get the policies they need, as well as for agents who can sell more policies, and for carriers who can expand their reach.
In this guide to leveraging wholesalers to grow your insurance business, we’ll dive into how wholesalers provide benefits including:
- Helping insurance agents ultimately provide clients with a wider range of insurance offerings
- Offering specialized expertise and strong carrier relationships
- Giving insurance agents more flexibility
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Expand Your Insurance Offerings
One of the most important ways that insurance agents can leverage wholesalers to grow their own business is to tap into the expanded insurance offerings that wholesalers can facilitate. If you want your clients to have a wider selection of policies from more carriers, especially for clients with unique risk profiles that are typically hard to find a policy match for, then working with wholesalers can be the way to go.
Work With More Insurance Carriers
Insurance agents might only have a limited number of carriers they can connect their clients with on their own, but an insurance wholesaler can help expand these options. Even if a wholesaler only focuses on a couple of specialized carriers, working with a few wholesalers can then mean that insurance agents ultimately access more carriers overall.
And this access isn’t just a vanity metric. Wholesalers can ultimately help insurance agents provide their end clients with more carrier options so that you can better serve your customers with more choices to meet their needs. This wider access can be particularly helpful for insurance clients who might not be a great match for standard policies.
Add Surplus Lines
Another advantage of working with wholesalers is that insurance agents can access surplus lines for clients who otherwise are unable to be matched with a policy. Some wholesalers specialize in this offering so that insurance agents can ultimately sell more policies to a wide range of customers.
“Producers are sometimes unable to find admitted carriers because the risks don’t conform to carrier risk guidelines. In other instances, the coverage might entail expertise beyond the capability of the producer,” explains the publication Chron. So, in these circumstances, insurance agents can work with a wholesaler who has a surplus lines license to then match clients to specialized policies, the publication notes.
Gain Specialized Knowledge
Another way that insurance agents can benefit from working with wholesalers is by leveraging the specialized knowledge that these intermediaries often have. Insurance agents tend to wear many hats and focus a lot on client service, and while you may have a good general grasp of several lines of insurance and nuances in policies, it’s not always possible to develop deep expertise everywhere. Wholesalers, however, may have more specific knowledge and relationships with certain carriers, which helps insurance agents ultimately provide better policy matches to clients.
An Insurance Journal article tells the story of Ryne St. Marie, who has a family history in retail insurance, but St. Marie ended up going into wholesaling where he can provide more specialized knowledge. “I feel like a lot of retailers have to be a jack-of-all-trades and work on many different kinds of businesses, but I really wanted the ability to just dive into one or two lines of coverage and become a specialist,” he says in the article. “If your wholesaler is a jack-of-all-trades, then you’re probably working with the wrong wholesaler.”
Go Deeper With Insurance Carriers
Coinciding with the specialized knowledge that many wholesalers provide, insurance agents can benefit from the deeper relationships that wholesalers may have with carriers. If wholesalers focus on specific areas of insurance, then they may know the ins and out of how certain carriers work and have a good rapport with these carriers.
As such, insurance agents can potentially tap into the benefits of being on good terms with carriers. For example, if a wholesaler has a deep relationship with a carrier, they may then be able to help insurance agents quickly get a policy underwritten or perform custom requests.
Add Flexibility to Your Insurance Business
Working with wholesalers can also help insurance agents grow due to the flexibility that wholesalers can ultimately provide.
For example, in the US, the majority of wholesale insurance brokerages work with non-admitted, surplus lines carriers that are not licensed by the individual states and therefore have more flexibility to offer unique, specialty products and more freedom in pricing.
Insurance Business America
Insurance agents can also add more flexibility to their business by working with wholesalers in the sense that these relationships can free up agents to focus more on other activities of their choosing. By leveraging the specialized policy knowledge, carrier access, carrier relationships, and other benefits that wholesalers provide, insurance agents can have more freedom to:
Source clients:
Spend more time on lead generation activities, such as diving into content marketing or networking, and then know that you can work with wholesalers to match these leads to the right policies. You may also have the flexibility to source a wider pool of potential clients if you can tap into wholesalers’ ability to provide surplus lines, for example.
Provide a great customer experience:
Insurance agents can also spend more time providing a great customer experience such as by offering clients the opportunity to meet to discuss their business and assess policy options in detail. Insurance agents can also provide a great customer experience, such as by creating content marketing materials that help clients solve business issues they’re facing, and you could maybe even work with wholesalers to create this type of content, accessing their specialized knowledge.
Manage internal operations:
Tapping into the benefits of wholesalers can also free up insurance agents to focus more on their internal operations, ranging from accounting to managing your own employees to your general day-to-day productivity. Wholesalers can be the ones who dive deep with specific carriers and provide specialized knowledge while you put your attention more toward building a streamlined, well-managed business. Ultimately, that can then help you serve more clients and do so efficiently.
See How You Can Partner With Wholesalers
Overall, wholesalers can be highly valuable resources for insurance agents. Insurance agents can tap into benefits like specialized knowledge, a wider range of offerings, and more flexibility as a whole. Look for ways to work together to match clients with great policy options, especially if you’re trying to support clients with unique needs.