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Comments, private messages, opinions please...I am narrowing down two P and C clusters and evaluating the contracts very closely..SIAA vs. Smart Choice. I know other posts on the forum (including mine) address the differences intimately, but I wanted to explore one point of contention between the two contracts: OWNERSHIP.
SIAA: Technically you own "direct" contracts through SIAA to the P and C companies and get paid direct from the companies and then cut SIAA their percentage back. However, if you ever want to sell your agency, you owe SIAA 30% of the value of your book, regardless of who you sell to, on the way out the back door. Is this truly ownership or a tight leash? The contract is also very restrictive on expansion of storefronts, etc. You need permission to virtually do anything from SIAA before you even think about it.
Smart Choice: You are technically writing under Smart Choice and they pay you after they take their cut. You can sell your "book" of clients to anyone you want to, with Smart Choice right of first refusal plus them sweeting the offer to you by 5% or 10% depending upon your production.
Really, both contracts are very restrictive in their own way. Why does "ownership" in this business seem to be a pipedream...Seems as regardless of how agents want to write we are always at the disposal of who we sign up through.
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To be fair, an additional comment..The SIAA agents I have spoken with seem to be fixated on "ownership" of their own book, but I think the SIAA contract sucks...From the 10K buy in, to the "promise" of production bonuses that may or may not materialize, to the monthly ongoing fees (that never go away)..At least with Smart Choice they cap what you owe to them every year at 15K...Really, really...Is it that important to be paid "direct" from the carriers as SIAA says...You leave SIAA you still have a two year non compete with their carriers anyway, how is that ownership even if you are paid direct?
SIAA: Technically you own "direct" contracts through SIAA to the P and C companies and get paid direct from the companies and then cut SIAA their percentage back. However, if you ever want to sell your agency, you owe SIAA 30% of the value of your book, regardless of who you sell to, on the way out the back door. Is this truly ownership or a tight leash? The contract is also very restrictive on expansion of storefronts, etc. You need permission to virtually do anything from SIAA before you even think about it.
Smart Choice: You are technically writing under Smart Choice and they pay you after they take their cut. You can sell your "book" of clients to anyone you want to, with Smart Choice right of first refusal plus them sweeting the offer to you by 5% or 10% depending upon your production.
Really, both contracts are very restrictive in their own way. Why does "ownership" in this business seem to be a pipedream...Seems as regardless of how agents want to write we are always at the disposal of who we sign up through.
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To be fair, an additional comment..The SIAA agents I have spoken with seem to be fixated on "ownership" of their own book, but I think the SIAA contract sucks...From the 10K buy in, to the "promise" of production bonuses that may or may not materialize, to the monthly ongoing fees (that never go away)..At least with Smart Choice they cap what you owe to them every year at 15K...Really, really...Is it that important to be paid "direct" from the carriers as SIAA says...You leave SIAA you still have a two year non compete with their carriers anyway, how is that ownership even if you are paid direct?
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