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... it's crucial to all insurance distributors. Carriers are looking for premium ... legal structure, such as a limited liability corporation, through which it'll...

...surance, as well as Professional Liability and Income protection. Andy’s fathe...SPs with his bank. His Professional Liability and Income Protection are with h...

... Manufacturers & Distributors Oil or Ga...

...nsurance companies, as well as distributors, consultants, and others. There a...

... more than a decade. The sources of these pressures are numerous, and the ultimate result may be dramatic. The nearly 40,000 independent insurance agents and brokers nationwide have been impacted most. Where's the pressure coming from? For starters, insurance carriers prefer to do business with fewer agents and with higher average premium volume per agent. Let me restate this point because it's crucial to all insurance distributors. Carriers are looking for premium volume. Because most agents produce far less than $10 million in annual premiums, they're finding it increasingly difficult to keep all of their carriers happy. Furthermore, the average agent has experienced top-line growth of less than 5% annually since the mid-1990s. This suggests that growing your way to sufficient premium volume is unlikely. Additional pressure is being applied by technology ... $1 billion in assets can often make the numbers work and might find an acquisition to be the most attractive strategy. Join a consortium. Perhaps the most promising model that has emerged to neutralize the leverage issue is the consortium - as few as a handful or as many as dozens of banks joining forces. This collection of banks will typically establish a separate legal structure, such as a limited liability corporation, through which it'll acquire or partner with agencies to market insurance products. The primary advantage of the consortium is that it gives banks access to, and perhaps shared ownership of, good insurance agencies at a fraction of the capital otherwise required. The cross-selling leverage of the bank is applied to a much smaller capital investment, and returns on equity soar. There are currently several consortiums at ...