Haris Ashley
There are several types of insurance marketing organizations (IMO) that independent insurance agents can partner with to do business. These include Field Marketing Organizations (FMOs), National Marketing Organizations (NMOs), Managing General Agents (MGAs), and General Agents (GAs). FMOs act as a liaison between an insurance carrier and an independent insurance agent, allowing agents to sell the carrier's products and earn a commission. They also provide training, marketing assistance, and back-office support. IMOs are similar to FMOs but may be smaller and focus on life insurance products. NMOs are a more general term for organizations that operate on a national level, offering both health and life insurance products or a range of support services. MGAs manage a team of downline agents and may partner with top-tier organizations, while GAs are typically in the downline of an FMO, IMO, NMO, or MGA. These organizations can provide agents with valuable resources, support, and access to a wide range of insurance products, helping them grow their business and better serve their clients.
| Characteristics | Values |
|---|---|
| Type of Organization | Field Marketing Organization (FMO) |
| Independent Marketing Organization (IMO) | |
| National Marketing Office (NMO) | |
| Managing General Agent (MGA) | |
| General Agent (GA) | |
| Focus | FMOs focus on health insurance products |
| IMOs focus on life insurance products | |
| NMOs may sell both health and life products | |
| Size | IMOs are usually smaller than FMOs |
| MGAs do not provide the same level of service, training, support, marketing, and technology as FMOs/IMOs/NMOs | |
| GAs are likely to contract directly with a writing agent or agency that has no downline of their own | |
| Pay | IMOs may not be able to pay agents as much in commission as FMOs |
| Agents working with MGAs can earn an override to support their downline agents |
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What You'll Learn
Field Marketing Organizations (FMOs)
When an agent or broker works with an FMO, they can offer their clients a diversified portfolio of insurance products, including health reimbursement arrangements (HRAs). HRAs are IRS-approved, employer-funded health benefits that provide employees with a tax-free allowance for healthcare expenses, such as individual health insurance premiums and out-of-pocket medical costs. By offering HRAs, agents can provide a cost-effective alternative to traditional group health insurance plans.
FMOs facilitate contracts between carriers and agents, and when a policy is sold, the agent earns a sales commission, while the FMO earns an override from the carrier. FMOs are typically licensed to sell insurance products in most or all states and have more negotiating power when it comes to commissions and other terms. They can offer agents higher commissions and contracts with more favourable terms than they could get on their own.
It is important to note that there is no standard definition or set industry standards for insurance marketing organizations, and the specific roles and functions of FMOs may vary depending on the carrier and their production requirements. However, FMOs generally provide valuable support and resources to independent agents and brokers, helping them navigate the complexities of the industry and increase their sales.
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Independent Marketing Organizations (IMOs)
IMOs are licensed to sell multiple carrier products in multiple states and work with a large number of agents. They offer valuable training and support to agents, helping them succeed in a competitive market. Some IMOs may focus on life insurance products, while others may offer a wider range of insurance options. For example, E4 Insurance Services is a national IMO that distributes life insurance, annuities, long-term care, and disability income solutions through independent financial advisors and insurance professionals.
The success of independent insurance agents often depends on their partnerships with top insurance companies and IMOs. By working with an IMO, agents can gain access to a diverse range of insurance products, making it easier to meet their clients' needs. IMOs can simplify the process of selling insurance, particularly for agents specializing in life insurance.
When evaluating potential partnerships with IMOs, it is essential to consider key factors such as industry expertise, customized solutions, track record of success, service offerings, and technological capabilities. Collaborating with a specialized IMO can provide measurable and impactful results that align with the brand's goals. However, it is important to note that there may be variations in the specific services and support provided by different IMOs.
While IMOs are similar to Field Marketing Organizations (FMOs), there are some differences in perception. Some agents believe FMOs focus more on health insurance, while IMOs focus on life insurance. However, this distinction is not always accurate, and both types of organizations work with a wide range of carriers and agents. The specific labels and standards for IMOs and FMOs may vary depending on the insurance carrier's definitions and production requirements.
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National Marketing Offices (NMOs)
NMOs are sometimes used as a more generic term for Field Marketing Organizations (FMOs) or Independent Marketing Organizations (IMOs). FMOs and IMOs are very similar, with FMOs potentially focusing more on health insurance and IMOs on life insurance, although this is not always the case. Both types of organizations work with a large number of agents and offer valuable training and support. NMOs can be used to refer to either FMOs or IMOs that do business across the U.S. and may sell both health and life insurance products.
NMOs, like FMOs and IMOs, act as a liaison between insurance carriers and independent agents, facilitating a business relationship and connecting the two parties through a contract. This contract permits the independent agent to sell the carrier's products, and when a policy is sold, the agent earns a sales commission, with the NMO earning an override. These organizations provide fewer services compared to captive agencies, and thus have a smaller commission split. The contract may also specify a minimum level of sales required for the agent to earn a preferred commission split.
NMOs, FMOs, and IMOs are fairly fluid in terms of their contractual relationships, and changing between them is often a simple process. However, if an independent agent's business is heavily reliant on the services provided by the organization, they may find it challenging to leave.
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General Agencies (GAs)
GAs can offer agents higher commissions than they might find elsewhere, along with other attractive perks. They often work with hundreds or even thousands of agents and multiple big-name and small-name carriers nationwide. This extensive network allows them to provide agents with access to a wide range of carrier products and opportunities.
One example of a successful GA is the AGA (Applied General Agency), which provides independent agents, agencies, and brokers with comprehensive insurance marketing resources, back-office support, and advanced tools. AGA helps its clients increase their commission through custom marketing plans, co-op dollars, and experienced back-office staff. The organization also offers technology that enables remote work and client enrollment, along with unlimited training to enhance an agent's selling abilities.
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Marketing Groups/Managing General Agents (MGAs)
Marketing groups and managing general agents (MGAs) are among the many insurance marketing organisations. However, there are no set industry standards to establish what an insurance marketing organisation is called, and carriers decide who qualifies as what. This means that carriers may define production requirements differently and introduce new names for certain top-producing organisations.
Managing general agents (MGAs) are a specialised type of wholesale brokers. They are intermediaries in the insurance market, like and unlike carriers, agents, and brokers. MGAs are not insurance companies, but they do some of the work of insurance companies. They are contracted to perform various business functions, such as underwriting, binding, policy administration, claims, and distribution, on behalf of insurance companies. MGAs differ from insurance brokers in that they are granted the power to underwrite and perform other tasks that would normally be performed by the insurer. MGAs can also broker a business to another carrier if it does not fit the insurer authorising the MGA.
MGAs are used by insurers to expand their reach and enhance insurance distribution. They also allow insurers to outsource work when testing new products or markets, or when it is more cost-effective or practical than keeping the work in-house. MGAs can be independent businesses, insurer-owned, or broker-owned. According to AM Best, there were 663 MGAs in the USA in 2020, 65 in Canada, and over 300 in the UK.
Some of the top MGA groups by revenue include Brown & Brown, Truist Insurance Holdings, Amwins, Ryan Specialty Group, and Gallagher. These top five groups held a combined market share of just under 20% of global MGA revenues.
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Frequently asked questions
A Field Marketing Organization acts as a liaison between an insurance carrier and an agent. They are licensed to sell health insurance products and connect the two parties through a contract that allows the independent agent to sell the carrier's products.
An Independent Marketing Organization is a company that works with independent agents to provide them with access to insurance coverage from various carriers. IMOs tend to focus on life insurance products, while FMOs focus on health insurance. IMOs are usually smaller than FMOs and may offer lower commissions.
National Marketing Offices are FMOs or IMOs that do business across the US and may sell both health and life insurance products. There is no significant difference between NMOs, FMOs, and IMOs in terms of structure or function.
Insurance marketing organizations provide agents with training, administrative assistance, and marketing strategies. They help agents connect with insurance companies, enhance their market presence, and offer a wide range of insurance products to their clients.
Some of the top insurance marketing agencies include BrightFire, Stratosphere, Agency Marketing Machine, First Page Sage, IMA, Socially Powerful, Musselwhite Marketing, Digital Logic, and Insurance Pro Shop.
