Brian Mahon describes the end result of establishing an independent brokerage as a “pot of gold,” and for good reason: not only does it provide brokers with the empowerment of acting as their own boss, but it can also grow a book of business and even attract a queue of potential acquirers.
For this reason, Mahon and his team at PROLINK Broker Network Inc. (PBN) seek to assist Canadian brokers with the process. In the eight years since PBN has been in operation, it has helped set up 60 independent brokerages that boast over $150,000,000 in aggregate premiums.
The process does entail a great deal of hard work, however, which is why PBN is selective about its broker partners.
“Applicants contact us and we go through a screening process,” said Mahon, vice president, operations, PBN. “We do our due diligence on them, and then look at their resumes and business plan to see what their long-term goals are and whether they align with ours.”
In addition to these professional criteria, he also seeks candidates with an entrepreneurial spirit, or those who “want to run their own business, but also that have the skill set needed to run and manage that business.”
Once the two parties agree to work together, PBN helps with what may be the most trying part of the entire process: obtaining contracts with insurance companies.
“We step in with our experience and relationships with companies and work to get those contracts for the broker,” Mahon said. “It’s next to impossible otherwise, unless you have a very, very high volume of business, and even then, it’s still challenging.”
Finally, PBN assists with finding an office location, and provides training on internal products and systems.
Once the business is operational, PBN retains a minority stake in the entity, but the brokerage remains autonomous – a key attribute that differentiates PBN from other broker networks.
“We really are unique in Canada in setting brokerages up as truly independent,” he said. “They don’t operate under our banner – it’s their name on the door, their name on the sign and the contracts we get are direct between themselves and the company.”
He encourages any brokers who are interested in starting their own firm to act now, as it can be a much more rewarding option than what currently exists in the market.
“It’s hard to predict what the insurance industry in this country is going to do in the future, but if you’re concerned about larger carriers buying all these other independent brokerages, then that’s all the more reason you want to have ownership of your business,” he said.
Insurance Business will feature a case study from one independent brokerage on Monday
