Breaking Into P&C

[LTS]

I see tons of banter on these boards about market access avenues. I see SIAA ridiculed by outsiders but never by a current or former member. That's a giant testimonial to me. Impression on me is that members tend to be very happy staying SIAA for life. Anybody out there been an SIAA insider with an opposing view?

I'm looking for P&C markets at the moment. Who's best for a scratch in P&C with ready made licensed staff doing other work with a 400 family existing client base? I have rental managers ready to refer tenants to me for contractually mandated renter & liability and real estate agents chomping at the bit to refer to me for flood. I should also be able to get homeowner referrals.

LTS



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[LTS]

I've heard SIAA is great...if you are with a good regional MA. Any input on SIA of North Carolina?

 

[nyc2phi]

I see tons of banter on these boards about market access avenues. I see SIAA ridiculed by outsiders but never by a current or former member. That's a giant testimonial to me. Impression on me is that members tend to be very happy staying SIAA for life. Anybody out there been an SIAA insider with an opposing view? I'm looking for P&C markets at the moment. Who's best for a scratch in P&C with ready made licensed staff doing other work with a 400 family existing client base? I have rental managers ready to refer tenants to me for contractually mandated renter & liability and real estate agents chomping at the bit to refer to me for flood. I should also be able to get homeowner referrals. LTS ----------

Have you looked into Erie?

 

[shawnmwalker]

Where are you LTS?

 

[LTS]

Where are you LTS?

Virginia. I plan on licensing in NC and WV...possibly TN.

 

[LTS]

Virginia. I plan on licensing in NC and WV...possibly TN.

Another option I haven't researched yet is to find an older agent. Agree for me and my office to produce for him until I've produced enough volume to partner with him ... Maybe buy him out as he retires. Anybody know anyone in SE Virginia that's looking for such an arrangement?

 

[Verbgravy]

Not hear to weigh in either way, but there are plenty of current SIAA agents that are unhappy. A few of them post on here. If you search, you'll find it.

 

[insurance1822]

SIAA will help you get appointments quickly. If you're a top producing agent you'll outgrow them quick & it may be costly to get out (that's the only downside.) Without them you wouldn't grow as quick.

I would look into local/regional clusters or aggregators who may have better terms focused more on getting a handful of agencies market access & better profit sharing opposed to doing that (while also making SIAA head-shed rich.)

 

[LTS]

That's just it...I can't find regional aggregators who offer a decent contract to a new start up with little P&C experience. They either only talk to guys with 3 years experience or that own a decent sized book... or they want to rape you. Hence their requirement for an NDA before they let you see their contract. (My experience has been that those with no NDA have solid contracts. I've seen a couple good contracts that required NDA...most under NDA are non-starters for me).

Smart Choice and Iriquois are great arrangements for a new entrant to the industry...unless you decide to get out (for whatever reason). Then you lose your appointments and you're blacklisted from all their carriers for 2 years.

Question #1) Wonder how much loss you'll have when you attempt to roll your book to self-procured carriers (that are non-Smart Choice/Iriquois). I'm sure some of your clients will be happy with their current carriers and will be resistant to move only because you did.

SIAA has a steep buyout, but at least you keep your appointments and entire book intact. You're business continues uninterrupted.

Question 2: if SIAA will help develop me, my agency and subs faster/bigger than I could on my own...and I can leave with my company intact, then why should I be afraid of their expensive but manageable buyout?

Question 3) is it preferable to roll your book on exit and risk losing clients (SC) or paying the steep buyout? (SIAA)? I think the answer lies with question 1.

Can any experienced folks provide any insight on how difficult it is to roll books and expected client loss rates?

 

[insurance1822]

I'm not speaking from personal experience but I think you'd been unable to convince many people to switch companies unless it's priced better. Even then it's subject to new UW guidelines anyway. I wouldn't count on rolling books like that. Even if you picked a carrier to roll to (who assisted with the quoting) you'd be lucky to get 25% IMO.

The odds of you producing enough business for long enough that it starts to make sense to leave SIAA isn't entirely in your favor. You'd want to be at profit sharing with each of your carriers before you considered it & that's assuming your books are performing well. If you have a carrier with a 5 year garbage loss ratio they'll be happy to get off you if you leave.

I'm the top producing personal lines agency in my SIAA group. I have a decent sized book with each company & have been at it for 3.5 years. I still don't think it would pay off. Maybe if I merged with another guy then it may make sense. But when you look at LONG term profit sharing and really run the numbers I think it's very unlikely that it would make sense to leave. The group keeps carriers 100% off your back which is a good thing. If you're on your own & start slowing down new business & have a poor loss ratio you may deal with BS you wouldn't normally.

Yes the exit fee is entirely manageable with siaa. For me id break even in as early as 1.4 years and for sure in 3.

SIAA is 100% a function of your Master Agency. Mine is top notch.

You absolutely could get carriers on your own. Maybe not all the best right away but this IS an option. Again it will take longer to get the solid representation that you could get immediately with SIAA thus you'll grow slower. Certain equations would suggest the buyout on a book that's 3x bigger is better then being on your own at 1/3rd the size.

You'd have to be a top performing P&C production machine of an office to make it make sense to leave siaa. Being on your own is great (you get 100% of the bonuses) but a few losses will crush you. Your profit sharing % is way smaller when you have a smaller book. It's VERY easy to have a few losses ruin you. Again unless you're a production machine you'll constantly be at risk of ZERO bonus with a handful of loses. Only way the equation makes sense on your own is being big enough with each carrier and that's all a result of again...production