Stay Independent, Not Isolated: Taking a Proactive Approach to Industry Shifts

High-performing independent agencies aren’t settling for just "doing fine," realizing that today’s success doesn’t guarantee future resilience. In an industry climate characterized by continued mergers and acquisitions (M&A) activity, the accelerated growth of aggregators, changes in profit-sharing eligibility, and the expansion of the excess and surplus (E&S) market, being proactive is a necessity. Many of these agencies, as a result, have aligned with ISU Steadfast to remain competitive, protect their profit sharing, and avoid being outpaced by larger brokerages, while also maintaining their independence.

Many ISU Steadfast members will say: "We didn’t need to join. We were doing well, but joining made us stronger."

Key Takeaways

• Stay proactive, not reactive. Anticipate change before pressure hits.

• M&A activity is accelerating. Your best accounts are already targets.

• Even top agencies are partnering. Scale and clout drive success.

• Profit sharing is under pressure. Aggregation helps stabilize it.

• The E&S market is growing fast — it’s harder to profit without leverage.

• Independence doesn’t mean isolation. ISU Steadfast offers both freedom and strength.

The Advantage of Anticipating, Not Reacting 

There are agency owners, however, who wait to pivot or make a move until they’re in a tough spot — whether that’s facing a disappointing profit-sharing year or the loss of a top account or market — before making adjustments. Stronger agencies anticipate and take action. Anticipation means shoring up your agency’s position before the pressure hits, according to Charlie Bedwell, Vice President of Business Development at ISU Steadfast.

The Acquisition Race Isn’t Slowing Down

Private equity firms continue to drive consolidation. According to M&A data compiled by Optis Partners, private equity-backed and hybrid brokers have been responsible for over 72% of all insurance brokerage mergers and acquisitions in the first half of 2025.

"Larger agencies are getting even bigger," explains Bedwell. "They are growing market share and have greater access to markets with increased buying power and bigger budgets."

The message for smaller agencies is clear: Ignoring the acquisition trend won’t insulate you from it. Your best accounts are already targets. Bigger competitors with more resources and greater clout with carriers are actively pursuing the very clients that sustain your profitability.

Even the Biggest Independent Agencies Are Partnering Up

Another telling sign of where the industry is heading is what the largest independent agencies are doing. The biggest privately owned agencies now have access to premium aggregation through their agency networks. These are agencies with strong profit-sharing, direct carrier access, and established infrastructure. Yet even they see the value in aggregating premiums and resources. If the industry’s elite believe scale is essential, mid-sized independent agencies should take note.

By pooling premium across the group, ISU Steadfast gains the kind of buying power typically reserved for the largest agencies in the country. This collective scale enables member agencies to access the same favorable terms and profit-sharing opportunities that are typically available only to the largest players. A single independent agency isn’t negotiating in isolation, but rather leveraging the strength of the ISU Steadfast group so that every member benefits from the collective clout of the whole.

Also, clusters and aggregators often focus on quantity, essentially telling carriers, "Look at all this premium volume; we should be paid more." By contrast, ISU Steadfast is built on quality, with a clear purpose: to grow profitable premiums alongside carrier partners. Only profitable business is admitted into the group, ensuring that carrier relationships are strengthened by long-term, sustainable performance, not just short-term volume.

"Many agencies that said they would ‘never join a network’ are now reconsidering," says Bedwell. By partnering strategically with ISU Steadfast, agencies can gain the benefits of scale — carrier clout, aggregation, and buying power — while preserving independence and contributing to a collective reputation built on profitable growth.

Profit Sharing Is Getting Harder to Keep 

For decades, profit sharing has been a cornerstone of agency revenue, providing a critical margin that allows owners to reinvest in staff, technology, and growth. But that cornerstone is cracking. A single severe storm, several claim-heavy accounts, or a modest dip in premiums can be enough for an agency to lose its profit-sharing eligibility.

"Carriers seeking to protect their own margins are raising their thresholds and tightening criteria," explains Bedwell. What once required $500,000 in premium to qualify might now require $750,000 or more.

Networks that aggregate profit sharing help stem this volatility. By pooling volume across members, they create consistency and make it easier for agencies to qualify for profit sharing each year.

As Bedwell notes, one of the primary drivers behind agencies’ joining ISU Steadfast is foresight. "Agencies recognize that waiting until they miss profit-sharing thresholds two or three years in a row leaves them behind the curve."

Commercial Lines Growth Is Creating a Divide

Another pressure point is the diverging path of the admitted versus E&S markets. Standard carriers are increasingly pulling back from classes of risk they once accepted. Those risks ultimately migrate to wholesalers and the E&S market. In fact, the E&S market grew from $50 billion in premium volume in 2018 to nearly $135 billion in 2024 and could reach almost $150 billion this year, according to the Wholesale and Specialty Insurance Association.

The E&S market can be a challenging space for independent agencies to profit from. Wholesalers retain a portion of the commission, agencies lose their profit-sharing potential, and insureds face additional brokerage fees. Also, staff often lose direct access to underwriters, making it harder to deliver the high-touch service clients expect.

Here again, scale makes the difference. ISU Steadfast, for example, leverages its collective volume with wholesalers to negotiate overrides, something an individual agency doesn’t have the power to secure.

Common Signs You’re Reacting, Not Anticipating

It’s easy to believe your agency is doing fine until disruption arrives at your door. But there are clear warning signs that you’re reacting instead of anticipating:

• You’re looking into networks only after losing a key account.

• You’re evaluating profit-sharing opportunities after missing thresholds for multiple years.

• You’re losing out to competitors that offer quoting tools, analytics, or market access you can’t match.

• You’re placing increasingly more commercial business in the E&S market with little upside.

As Bedwell explains, many ISU Steadfast members were "independent, successful, and not for sale. But they saw what was coming and decided to move before the market forced their hand. And now, they’re thriving, with more stability, better carrier leverage, and stronger retention."

Independence Without Isolation

The challenge for independent agencies today is striking a balance between autonomy and the need for scale. Owners fear losing their identity, culture, or decision-making authority if they partner with a larger entity. But this doesn’t have to be the case.

ISU Steadfast empowers you to maintain full control and stay competitive in a changing market, leveraging the benefits of scale and resources. You choose how you operate your agency, which carriers you prioritize, and there is no cost to leaving the network if you choose. Independence isn’t sacrificed; it’s safeguarded.