And then one insurance company changed its mind.

A large carrier gave me an agency appointment and even allowed me to use its office on occasion. This appointment enabled me to approach other carriers and show that I was “established.” My relationship with this fine company flourished. Premium volume went from zero to more than $2 million. I was appointed to its elite U.S. Producers' Council. I had excellent rapport with the branch and home office staffs, and had a close relationship with the person who appointed me.

After nearly 20 years, I ended the relationship and moved the entire book of business to another company.

Related: How to formulate an agency exit strategy

A great relationship turned sour, and I had to make a difficult decision in the best interests of our business. It's rare that an independent agency with a good-size book would initiate an agency termination, but that's exactly what we did. So what happened?

The insurance company created a marketing strategy that it felt could rapidly create growth for its commercial insurance division. It selected its best agencies, ours included, that consistently showed profitable growth and large profit-sharing payouts, and gave these favored agencies a new contract that would provide, among other things: an immediate 5% commission increase; a guaranteed three-year renewal on every policy; a bonus if the agency ordered the inspections and audits; limited claim draft authority; an enhanced profit-sharing agreement based on new business goals; and, incredibly, high levels of underwriting authority and binding limits.

In the first year the growth was profitable. The second year was very successful, but some underwriting changes (limitations) were imposed. The company opened up the program to some of its second-tier agents. In the third year, the losses started to pour in as agents were writing business for which the program was never intended, and many were accepting sub-produced business. Over time, the company underwriting tightened, inspections and audits were taken away, and new business was rescinded after it was bound. The company tried to clean up the program through restrictions. This was a mistake.

Our revenues were affected dramatically. I informed the company that unless we were allowed to do business as usual, I would have no choice but to terminate our relationship. They actually laughed at me.

It did not take long to find a willing carrier to show interest. It reviewed our agency production and we negotiated a Bordereaux (a rollover) that provided guaranteed renewal for three years of the entire book of business, enhanced profit sharing, and — the icing on the cake — a 5% bonus for three years on retention of the business rolled over. I went back to my first carrier and presented the offer. They said they could not make a decision locally; it had to go to headquarters. I gave them a month to respond. They never did.

What would you have done?

I cancelled our agency agreement, accepted the Bordereaux arrangement with the new carrier, and never looked back. It turned out very well and resulted in new personal relationships and business opportunities. This encompassed all of the elements of carrier relationships: loyalty, market stability, profitability, recognition, trust, and the great beginning and then bad ending to a long relationship, which was replaced with a new great beginning and a new long-term relationship.

Don't ever lose sight of the fact that your relationship is not just with a carrier, but also with the people at that carrier. Whenever you can, make those relationships as personal as possible, but know that someday, circumstances might dictate that you have to walk away in the best interest of your clients — and your business.

Related: Becoming an 'insurance hero'

Barry Seigerman is an independent broker/producer. Contact him at [email protected]. Opinions expressed are the author's own.