I have been with a captive company the past 11 years and am looking to go independent and I am looking for advice as to the best way to do that.
I have been looking at SIAA and meet with a rep yesterday and they are promising some very high commission rates but also want some very high money up front. do they earn the 15 grand on the front?
+an addittional monthly membership (6-10% of comm)?
They also have profit sharing and excess compensation I believe paid at the end of the year.
Please let me know if you can reccomend any of the other guys also.
Thanks
Mark
Ive been with them since 10-07. I was also a captive agent before them. In the 2 years I've been working with them I am very happy. I was able to make payments on the up front money. Had an initial payment then they gave me a 3 year payment plan that I pay when I send in my monthly reports.
I'm in the process of opening my independent insurance office. And I've researched SIAA, however the contract they have you sign, seems like they're putting a gun to your head. I'm in Ca, so i'm not sure if it's different in other states, but the contract is for 15 years! and they take 25% of the book anytime you sell (with a clause of them gaurenteeing SIAA a fixed amount of 2.5 times your book, who knows what can happen in 15 yrs, to long of a contract, in my opinion) My buy in was $8,000, but after negotiating, he said he'll go down to $6500. The point being, if you do it neg the buy in.
They give you 90% of the commission they get with the carriers, but yet you pay a guarentted min of $300 then a min of 10% a month, after the first 6 months. I thought it was to rich for my blood.
Check out Smart choice or TWFG. However, if you just want carriers and binding authority isn't imporatant, Insurance noodle seems to get the best reviews.
I'm in the process of opening my independent insurance office. And I've researched SIAA, however the contract they have you sign, seems like they're putting a gun to your head. I'm in Ca, so i'm not sure if it's different in other states, but the contract is for 15 years! and they take 25% of the book anytime you sell (with a clause of them gaurenteeing SIAA a fixed amount of 2.5 times your book, who knows what can happen in 15 yrs, to long of a contract, in my opinion) My buy in was $8,000, but after negotiating, he said he'll go down to $6500. The point being, if you do it neg the buy in.
They give you 90% of the commission they get with the carriers, but yet you pay a guarentted min of $300 then a min of 10% a month, after the first 6 months. I thought it was to rich for my blood.
Check out Smart choice or TWFG. However, if you just want carriers and binding authority isn't imporatant, Insurance noodle seems to get the best reviews.
Good luck.
Jeff
everything in the contracts can be negotiated. Mine is not for 15 years...
Thanks for the responses!! I haven't seen the contract yet but was told 15000 upfront or 5000 down and 10,000 at 6% over 2 years. Also new about the 10%. The commission rate for the primary carrier was 24% with loss ratio below 60 or 20% with a higher loss ratio, not sure about renewals. It would seem to be worth it for that commission rate but no gaurantees with it.
I am looking at agent secure, smartchoice, and TWFG also. It is hard to tell the best route. anybody else??
Looks like you are going from a captive to a captive. What are they offering you for the up front money. Why not go direct or get a broker and start a mail campaign with the money you would pay to them. Look at the board and you will see that there are contracts for 125%. I am sure that some of the big producers have a bigger contract than 125%. I am just average and have that. Seems after the amount of time you have been in the business you would have no problems being an independent.
They give you 90% of the commission they get with the carriers, but yet you pay a guarentted min of $300 then a min of 10% a month, after the first 6 months. I thought it was to rich for my blood.
Check out Smart choice or TWFG. However, if you just want carriers and binding authority isn't imporatant, Insurance noodle seems to get the best reviews.
Good luck.
Jeff
SmartChoice is really smart choice. You dont pay a penny to start with, and you keep 100% of the commission after 50k in commissio. You can roll-over to any where - just cannot write on the carriers they appointed you with. I've also emailed SIAA just to see what they offer, but I'm more likely going with Smart Choice (Binding authority, no upfront fee, you own the business)
Looks like you are going from a captive to a captive. What are they offering you for the up front money. Why not go direct or get a broker and start a mail campaign with the money you would pay to them. Look at the board and you will see that there are contracts for 125%. I am sure that some of the big producers have a bigger contract than 125%. I am just average and have that. Seems after the amount of time you have been in the business you would have no problems being an independent.
Thanks for your input! I could contract on my on for the life side but on the P & C side contracts can be hard to get unless you have an actual book to roll. I can't due to non compete.
I do have a favorable relationship with Foremost so could possibly work something out with them since they are now part of Farmers and Century21. Also Progressive who is getting into homeowners now I think.
Smart Choice, is the 30% of 50,000 comm just a one time deal or are you paying that every year?
Looks like you are going from a captive to a captive. What are they offering you for the up front money. Why not go direct or get a broker and start a mail campaign with the money you would pay to them. Look at the board and you will see that there are contracts for 125%. I am sure that some of the big producers have a bigger contract than 125%. I am just average and have that. Seems after the amount of time you have been in the business you would have no problems being an independent.
With them you do go direct. They get you the direct appointments and after that they are out of the picture. I guess it depends on what everyone is looking to get out of the deal. I was captive for 10 years and when I left my company I started trying to get appointments on my own. It wasn't impossible but not easy. Especially the major companies. If they were willing to appoint me they were going to have me under a microscope for years. They also didn't want to touch me if I was going to try and get appointed with too many other carriers. After going with SIAA I had appointments with 12 carriers in a year. Half of which are major companies. I told them what carriers I wanted and shortly after I had them. Most carriers didnt even need to speak with me. They appointed me simply because SIAA asked them to. The premium commitments if any were very small and you get profit sharing from dollar 1. To me that made it all worth the start up costs and the 10%. Not to mention the discounts I get on many things because I'm associated with them, management system, comparitive rater, advertising, lead services etc...
30% of the first 50k would be a turn off to me due to that being a major chunk the first few years when I'm trying to get back on my feet. but like I said it all depends on your individual situation and what you are look to get out of the deal.
............ To me that made it all worth the start up costs and the 10%. Not to mention the discounts I get on many things because I'm associated with them, management system, comparitive rater, advertising, lead services etc...
30% of the first 50k would be a turn off to me due to that being a major chunk the first few years when I'm trying to get back on my feet. but like I said it all depends on your individual situation and what you are look to get out of the deal.
I dont understand, how do you justify 10% plus 15K in upfront cost over 30% commission sharing upto 50k. If you do 200k in commission (quite possible by 2nd/3rd year due to renewals) then you're paying only 30% of 50k = 15k to Smartchoice. SIAA will charge 20k, and the difference will keep on widening as more you earn in commission.
I'm not questioning your logic, just trying to understand from my prospect - I'm getting ready to sign contract in next couple of weeks or so. Therefore, just exploring all the options available - so far I like SmartChoice, unless I'm missing anything.
One more thing, where the money comes from for the profit sharing?
I'm not justifying it just saying something like that for me would have been tough due to the personal situation I was in when I made the change. I did not look into Smartchoice so I certainly can not say which is better. What I was getting at is simply some things may work for one person but not another. SIAA offered incentives that were important to me. As for the profit sharing there are pro's and con's to being able to get it at dollar 1. The pro is obvious and the way that it is possible is that the companies will look at the entire SIAA book with them instead of the individual agency. So instead of my agency needing to wait to my book gets to 200k or whatever with them I'm lumped in to the multi-million dollar book that SIAA has with that company. So as long as I'm one of the agencies that has a good loss ratio I will get a piece that is relative to my book size. The down side is I could have a great loss ratio but if the entire SIAA book as a whole is not profitable then I don't get anything.
The pro is obvious and the way that it is possible is that the companies will look at the entire SIAA book with them instead of the individual agency. So instead of my agency needing to wait to my book gets to 200k or whatever with them I'm lumped in to the multi-million dollar book that SIAA has with that company. So as long as I'm one of the agencies that has a good loss ratio I will get a piece that is relative to my book size. The down side is I could have a great loss ratio but if the entire SIAA book as a whole is not profitable then I don't get anything.
Thanks for the answer. This make me look more seriously into SIAA. I'm meeting with SIAA rep next week. I wouldn't mind paying the upfront fee, if that helps in the long run. The SIAA website doesn't give much info on new agency start up etc.
Are you getting 15% commission on most lines?
When I spoke with them several years ago, in our area, SIAA had more preferred company contracts. The advice about negotiating the contract was legit. When I said "no way" to 15K upfront it immediately went to 9K, I'm guessing I could have negotiated a lower rate. Same with the contract, when I said it was unreasonable I was told to make a list of what I wanted changed. I'd advise having your attorney go over it before you settle for a mediocre deal. Good luck in your efforts
Thanks for the answer. This make me look more seriously into SIAA. I'm meeting with SIAA rep next week. I wouldn't mind paying the upfront fee, if that helps in the long run. The SIAA website doesn't give much info on new agency start up etc.
Are you getting 15% commission on most lines?
yeah I wouldn't imagine it would say much. I bet if you looked at everyone's different contracts they will vary greatly. Once you sign the terms you agreed to are confidential.
Yes I get from 15% to 20% on Standard business. The one non-standard company gives me 10%. You get paid directly from the companies and get the same commission that the rest of the Independent world gets. You have the direct appointments and like I said once you get them SIAA is not in the picture. Every month you submitt a report to SIAA showing what you were paid in commission and you cut them a check for 10% for the first 10k in commissions. After 10k the percentage goes down in stages.
Yes I get from 15% to 20% on Standard business. The one non-standard company gives me 10%. You get paid directly from the companies and get the same commission that the rest of the Independent world gets. You have the direct appointments and like I said once you get them SIAA is not in the picture. Every month you submitt a report to SIAA showing what you were paid in commission and you cut them a check for 10% for the first 10k in commissions. After 10k the percentage goes down in stages.
Amazing. I'm glad I came to this forum. First I was almost sold on State Farm agency. After reading other people's comments and experiences, I dropped the idea of SF. Then, with a thought of going Independent, I was almost certain to go with SmartChoice, and refused to even consider the other options. Now, it seems SIAA could be better than SmartChoice, even after paying 10k or so upfront. I'm meeting with him next week, may be then he will bring in the terms.
Met with SIAA guy. It seems pretty good at this time. He did mention that contract would be for 15 years, and $8500 upfront fee. I will be negotiating the upfront fee, ofcourse. Should I be concerned with the 15 years contract? How big that deal is?
Again it depends on what you are comfortable with. that can be negotiated, mine is not 15 years. I would say the shorter the better so I would at least negotiate it. Even after your contract is up you may decide to continue with them anyways.
Anyone with Experience with SIAA ?
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