Currently Captive - Tips for Becoming Independent

[NCAgent]

But there are still minimum premium requirements though siaa, right? And what would be an example of minimum?

You would go from 100-300k in production to like, 25-100k with an average of 50k. You also get a little more slack from the carriers because they aren't going to micromanage EVERY agency under the cluster since the cluster really has you guys set up as branches under one agency (in a very simplified explanation.) You get some slack to get things up and running and some attention from carriers that normally won't touch you because the cluster is also able to help get the agency up and running.

One of the biggest carriers I would mention that does well with clusters but not direct appointments is Safeco. Safeco doesn't like direct appointments until you have a 200k-300k book but will do an appointment as one of your first carriers as a cluster agency (at least in my state and some surrounding states).

SIAA has some minimum requirements, sure, but I'm sure they also give a lot of support for the money you are paying. This is what the carriers like and are willing to give a chance since you are kind of being baby'ed.

Captive experience is nice but you had 10 years to learn one company. You will be learning 4-5 companies in 6 months instead to be successful, and in a lot less of a structured environment.

 

[mikemix]

So companies like siaa make you Pay a fee to be a part of its network? Or do they just take a % of your comm ?

 

[nyc2phi]

Most clusters if not all like SIAA make you pay some kind of fee. Sometimes on the front end sometimes on the back or sometimes monthly

 

[JAM1]

Clusters are the way to go. you will have to give up a cut but then commissions are higher. For example as captive you are probably getting 10% on Auto. as an IA we dont get anything less than 15%. Bristol west gives Farmers agents 10% and gives us 17%. you will never look back in regret once you leave the captive.

 

[Todd Payne]

What part of CA are you in?

Regarding clusters, do your due diligence. Some want not only a monthly fee or percentage of commission, but also take an ownership position in your book. Also look at exit strategy from the cluster, as some lock you into a long-term contract. Another issue to take a look at is how the cluster handles contingency commissions/profit sharing.

As others have indicated, you may be able to get some direct company appointments just starting out, but each will have high volume requirements so you won't be able to get as many. The big advantage of being independent is being able to shop the market and choose the best company for your client. Hard to do if you only have a couple of companies.

Do a search on the forum regarding clusters and you will get a lot of information. I ended up going with PIIB for various reasons.