A couple of weeks ago, we caught wind of a new network that had started up here in Massachusetts. Called the New England Insurance Group Network, we contacted the owners to find out more about why they started this company and what it can offer the independent insurance agents of Massachusetts. Here’s what they had to say:
Who is behind the creation of the New England Insurance Group Network?
Edward Lukatsky and Steven Salhaney CEO and Presidents of the New England Insurance Group (Agency) and also the New
England Insurance Group Network (Network).
Why was this new agency network started?
Seven out of the 10 members were together for 14 years in a network called Advantage Insurance Agency Network, which has since disbanded. Seven of the members wanted to stick together because we knew that we had something special going on with the relationships we had built with our carriers, but even more importantly the synergy that we all had with one another. In fact, although we all own our own agencies, we have always felt like we are all partners and working towards the same goals and helping each other achieve our next level of success.
We have had many successes and a good time getting them together. Also, Steven and I have been in acquisition mode for almost a decade and one thing we come across often is that the agent is not looking to sell, but would love to be a part of something bigger. This gives agents the best of both worlds., where they own their business and their agency and have all the autonomy that they want, but at the same time they are part of a much bigger organization. There are multiple reasons that agents decide to join a network. Several of the main reasons are better market representation, higher profit sharing payouts as well as incentive programs with commission overrides, but also resources and networking opportunities with one another. We do a lot of best practices networking with one another as well.
The result is that all of sudden, members do not feel like they are alone in this business and there is a team that is working together to achieve a common goal. The core of this group has worked together for 14 years and everyone has each other’s back.
The Advantage Insurance Agency Network sold its assets in 2012. The New England Insurance Group LLC (NEIGN) was filed in October 2014. What happened during that two-year period that kept the founder group of NEIGN together?
The Advantage Insurance Agency was sold in 2012 and continued to be in operation under Hub International’s leadership. The NEIGN was formed in October 2014 and started operating on January 1, 2015. All members of the Advantage Network honored their contracts until the terms of expiration on December 31, 2014.
What do you hope to accomplish with The New England Insurance Group Network?
We are currently at $60 million in premium and are on track to be $100 million in the next few years. However, our primary focus is underwriting and profitability. I cannot stress that enough. This is what our carrier partners expect from us, and that is what we expect of our ourselves. We have grown to 10 members by “Invitation Only,” and are now being approached by many agents looking to join. Profitability is the number one factor in being invited to join our group. We can’t have profitable agents subsidizing unprofitable agents.
Why not just join another agency network that are already out there?
Right now, no one is doing what we are doing, at the level that we are doing it at. As I mentioned above, seven out of 10 members, including the founding agency, have been together for over 14 years.
What do you think distinguishes the New England Insurance Group Network from other agency networks?
A few things come to mind:
- Focus on profitability;
- The level at which we execute our goals together as a team;
- The level at which we share our ideas and business best practices together;
- Our focus on fewer carriers but deeper relationships/partnerships with the ones we have chosen to work with;
- 100% ownership of one’s book of business;
- Direct appointments with the carriers we work with;
- Easy exit from the network. We only want members that “want” to be here and who do not “have’ to be here. If someone changes their and decides they no longer want to be a member, all that is required is a six-month’s notice of exit. That is the difference. We do not hold anyone hostage.
What is your main goal for this year?
We want to strengthen the carrier relationships with the ones that we are partnering with in our future together. Ideally, we are looking to bring on several new qualified agent members in the coming year.
What type of member are you looking for?
While we will speak with anyone who is interested in learning more about NEIGN, agents should keep in mind the following criteria that we are looking for:
- Independent agent mindset
- Between $2 million to $10 million in premium
- Similar carrier representation
- Same focus on being profitable and knowing how to underwrite risks
- Someone who is looking to be part of a bigger team
How many insurance carriers do you have currently?
We have about 15 carriers at the moment. These include local companies, regional, super-regional, and national carriers. We believe the days of having as many carriers as possible have passed. Today, it is more important to have fewer, but more meaningful relationships with the carriers we partner with.
What is the admissions process for prospective agencies that want to join NEIGN?
The number one criteria for entrance is being a profitable agency and like-minded when it comes to the quality of business that we write. Secondly, the member has to be of a team player mentality and understand that we are all working together to achieve a bigger goal as a whole, than we could as individuals. A review of the prospective agency’s current insurance companies, loss ratios, growth, perpetuation plan, future objectives, computer operations also are part of what is reviewed for compatibility and admission to the network.
We do not approve or critique, but we are looking for agencies that have a vision for tomorrow and are excited about their future.
You indicated that profitability is the No. 1 factor for being invited to join the NEIGN. What happens if an agency becomes unprofitable? Are there any penalties? Are there any reductions in commissions?
No, there are no penalties or reductions in commissions. All member agencies are like- minded in regards to profitability. That’s one of the criteria to be in The Network. However, if an agency becomes consistently unprofitable and refuses to do anything about it, than they would no longer be a fit.
Once an agency has become part of the NEIGN, if they decide to leave do they lose the access to carriers that they’ve placed their business with?
The more successful each independent agency is, the more successful the entire independent agency system is. We would not cancel or request any contracts to be cancelled; that would be between the agency and the carriers.
What are the financial incentives that would benefit an agency who becomes a member of NEIGN?
- Profit sharing in higher tiers with every carrier. An agency might be in a higher category with one or two carriers, but with us members are in a higher category with over 10 carriers.
- Profit sharing from carriers that they do not have enough production to otherwise qualify for it.
- Overrides on commission.
- Incentive plans for new growth.
- Higher book roll payouts.
- Discounts on critical software.
- Top tier company benefits.
What are the main contractual commitments that an agency joining the NEIGN makes as a result of obtaining membership?
Instead of just actual dollar volumes, we look for positive attitude, commitment to our common betterment, agreement to work to be profitable and the desire to be stronger as an independent while being part of a team.
In becoming a member of NEIGN, what differences would an independent agent see as a result of joining NEIGN? What elements of control might a new member have to give up over the running of their agency?
No loss of control but rather a desire to work with and become part of an organization that benefits its members and partners.
Our Network members are all independent agencies. Our business plans take into consideration what benefits all, not just the singularity. No surprise there, but that planning does not cause any conflict. You run your offices the way you did before joining. You still pay your electricity and payroll. You still keep your name and identity.
What operational benefits does an agency gain by joining NEIGN?
Sharing of best practices with one another, but also we handle the management system piece for our members and everyone uses each other as a resource when we need to.
What is the distinguishing or unique benefits that NEIGN offers the type of agency you’re looking for if they join NEIGN?
As I said, we do not strive to be the biggest so our growth allows us to do what is best for the member agencies and not necessarily the organization. We have manager’s meetings approximately every 6 weeks where we review information that affects us all. This also promotes comradery and cohesive operational focus. We work hard and have some fun doing it. Our plans include some upcoming events that will be fun and profitable for all involved.
Additionally, we use each other as a resource for markets, HR, operations, information…anything we do. We want our agencies to be successful and profitable with the companies they represent, therefore the agencies are not required to be appointed to all companies, yet they have access to all companies. That reduces “commitment anxiety” and so all we have to do is write with the company that’s best for that specific situation. Member agencies are not allowed to solicit clients or B.O.R. clients of another NEIGN agency. We do not have protected areas, just protected clients.
If an agency joins NEIGN are there any barriers to exit? Notice period? Exit or termination fees?
It is very important that the commitment works both ways,so the restrictions to exit are minimal, meant to cause no financial or business disruption to either party. There are no fees and since everyone owns their own books, there are no barriers.
How does NEIGN differ from a cluster?
A cluster to us is a couple of agencies ‘clustering” together to get more profit sharing. While that is a benefit of our group, we feel we are much more than that. Perhaps, a more appropriate title for our group would be a Partnership rather than a Network, because all though we all own our agencies and are not a franchise, we do value each other to the point where we go out of our way to help one another achieve our highest potential in several aspects of our business. We joined together for more than just increased profit share.
Is there any limit on the number of members that can join NEIGN?
We know that will be something to address in the future, but not at this time. Right now we are focusing on quality, not quantity.
What is the projected footprint of the agencies in the NEIGN? The title says New England Insurance Group. Are there agencies outside of Massachusetts? If not, is the goal to bring in other agencies outside of Massachusetts?
At this time our operations are primarily focused in MA however we have friends in other states who are considering their future options. Several of our member agencies are licensed in and have business in multiple states.
How should interested agents get in touch with NEIGN?
Anything else interested Massachusetts agents should know?
We are not the biggest Network, but we are the best!