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Originally Posted On: Brightway Insurance vs. Covered by SAGE: Making the Best Choice (agencyheight.com)

 

The millennial market has forced insurance brokerage models to evolve to address the changing priorities of consumers. A landscape dominated by large captive agencies like State Farm as well as Allstate is slowly being replaced by insurance companies that give choices to the customer and provide advisory services. Agents of Brightway Insurance Franchise and Covered by SAGE enjoy similar propositions but through radically different delivery methods. So, how do they differ?

Let’s take a look at these brokerages trying to reshape P&C insurance: Brightway Insurance and Covered by SAGE.

Who is Brightway Insurance?

Brightway is an insurance brokerage that operates on a franchise system. Hence, Brightway agents certainly have the backing of a reasonably trusted name, remote servicing assistance, and a degree of operational autonomy.

How do Brightway Insurance agents make money?

Brightway agents earn money based on a pre-agreed split with the franchise owner. Depending on what kind of model you choose, the commission split varies from 85% to 50%. On all renewals, Brightway offers 50% commission to the agents.

How does Brightway make money?

Brightway insurance franchise primarily operates on a franchise model with 200 franchise locations in 22 states. As such, it has franchise fees as well as operational fees, and the split of the sales commissions from the agents.

Brightway’s franchise fee is a flat one-time non-refundable fee of $60,000. The total initial investment estimate for starting a Brightway insurance franchise ranges from $90,000 to $180,000, depending on which state an agent will be operating in, the size of their agency, and a variety of other factors.

Besides this, Brightway also employs an out-of-pocket fee schedule, which includes:

• A “Shared Expenses” fee charged bi-monthly, equal to a portion of the agency’s income.
• Transfer fees ranging from $2,500 to $10,000.
• On-demand marketing fees at “reasonable cost.”
• Bottom line: even if agents make no sales, Brightway still makes money from the various fees and costs associated with starting and maintaining a franchise.

It has recently started a non-franchise model of business too, but this serves more as a stepping stone into starting a franchise rather than a permanent option. While starting costs are significantly lowered, so is the commission that the agent earns.

Who is Covered by SAGE?

 

Unlike Brightway Insurance, Covered by SAGE is comparatively new to the insurance industry. It has chiefly been based in Georgia for the past few years, and there are plans to expand nationally in the coming years.

Like any newcomer looking to unseat incumbents from their pedestals, Covered by SAGE has a unique approach to solving age-old problems with great customer service. The company is based on the belief that agents should be at the forefront of insurance, and its business practices highlight this. It is also backed by investors that have revolutionized the industries in which their companies are prevalent.

Covered by SAGE works on a brokerage model, and looks to facilitate the work its agents do with proprietary plug-and-play technology. Like Brightway, it also offers agents high-quality remote servicing facilities. However, it provides these services without any strings attached, unlike Brightway.

How do Covered by SAGE agents make money?

Similar to Brightway Insurance, Covered by SAGE agents make money through commissions from sales. The rate varies according to the line of business.

Covered by SAGE offers agents up to 95% split on new personal lines policies, and 50% on renewals. Additionally, it also offers a 60% split on new commercial lines policies, and 40% on renewals.

How does Covered by SAGE make money?

Covered by SAGE makes money exclusively from the commission split that it offers agents. It also charges an initial onboarding fee of $2,500, and $250 per month from the seventh month onward.

Because it does not charge any additional costs to the agents, Covered by SAGE’s success is intimately tied to the success of the agent.

How wide is Covered by SAGE’s market?

Covered by SAGE is appointed with over 35 carriers as well as a few more are reportedly in the pipeline. Unlike Brightway Insurance, Covered by SAGE also allows its agents to sell commercial lines, and life and health policies.

How do Covered by SAGE and Brightway Insurance compare?

Brightway Insurance is a franchisor, and as such, there are a few strings attached to running a Brightway insurance agency. As stated above, agents can enter the Brightway insurance franchise through three different ways:

• Firstly, the Retail Agency Franchise option, where the agent must start a retail agency with 900 to 1300 sq foot of retail space. (Commission split: 85/15)
• Secondly, a scaled-down Office Agent Franchise option, where the agent must lease 400 to 900 sq foot of professional office space. (Commission split: 80/20)
• Thirdly, the Non-Franchise option, is a booster for agents to enter the franchise after six months to a year. (Commission split: 50/50)

All of the options an agent chooses eventually lead up to owning a retail agency. Even though agency owners get the highest commission splits at 85/15 for new businesses, the agencies are pricey to maintain.

Hence, the additional costs and fees associated with running a retail outlet weigh down heavily on the eventual profits of the agent.

In a nutshell

Covered by SAGE vs. Brightway Insurance: Which should you choose?

Brightway Insurance has been in the market for a longer amount of time; it has been operational for almost twelve years now with numerous Brightway locations. As such, its business practices are commendable, and its offerings are consistent across the board.

However, an insurance agency owner will always attach strings to the franchisee, and as such, independence for an agent will not be as robust as it could be. Additionally, fees, as well as other scheduled charges, will deplete the agent’s revenue. Restricting the lines of business the agents can sell does not allow agents to flourish as much as they could.

Covered by SAGE is a new insurance agency, but it is here to solve the problems insurance agents face today. Big captive carriers like Allstate and Nationwide have started to see the value of independent agents, and have forayed into the independent market in some capacity.

In a hyper-saturated market, Covered by SAGE is looking to shift the focus away from selling insurance to enabling agents to become risk advisors. The company maintains that technology can be a significant enabler for progress, and disruption through technology is not only inevitable but very necessary.

As such, its practices and policies allow an agent to focus on new business sales with minimal strings attached. As the agent prospers, Covered by SAGE will thrive without a doubt.

For agents looking for a modern brokerage that allows them freedom unheard of in the industry, they should consider joining Covered by SAGE.

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