Observations & Questions from a Hawaii Captive Moving to Maryland - Scratch/clusters/newbies?

Sep 28, 2015

  1. CIServices

    CIServices Expert

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    First off I am a newbie so please bear with me. I have product knowledge from a captive producer standpoint but IA is foreign.

    I am currently learning the trade through a successful Big Box agent in Hawaii. I make a good salary with, all things considered, good commissions. 1.5 years experience.

    The end goal is to have financial freedom through an independent agency focusing on PNC. I am originally not from Hawaii and will be moving back to Maryland to plant my roots.

    So....with that in mind please allow me to pick your brains :err:

    My latest question that has come to mind is: What standard carriers are most competitive in MD/PA/DE/VA?

    This question arises when considering Clusters/Aggregates/Alliances. These groups willingly post their carriers which you could have access to, but I'm at a loss because I don't know whose most competitive in Maryland.

    Okay now, the second portion of my question is in regards to these Clusters. There is an huge amount of discussions on these forums which I've tried to sift through. I want to share with you my perspective from what I've read so far in the hopes to have someone point out holes in my understanding.


    Someone researching these Clusters will see a few dominant companies that keep popping up. SIAA, Smartchoice, Insurance Noodle, Superior Access....

    SIAA - which seems great...to a point.
    -They require upfront $. Great, no problem. I understand having some skin in the game.
    -They have a great commission cut...profit sharing..awesome.
    -The thing that hurts is that you have to lock in with them for like 15years, depending on your contract. And if you want to sell your book or get out of the agreement they take a nice bite out of you.
    -Seems like alot depends on your local MA agency.

    With that, I've seen compelling arguments from both sides regarding SIAA. They seem like they offer their agents great service considering they own a portion of the book. Some IA's love their service while some forum members think they are the insurance worlds mafia...interesting

    Smart Choice
    -Seemingly easy to get involved...no upfront fee...and you can leave anytime you wish...
    -70/30 cut hurts...but I know i know..."what do you expect your a scratch IA..."
    -2 year non-compete after severing the relationship...meaning if you grew big enough to go direct with your existing carriers you cannot for 2 years
    -Offer binding authority

    Insurance Noodle
    -Seems more for the commercial lines

    Superior Access
    -From what I've read, no binding authority, and takes time for underwriters to get back to you....not bad mouthing just observing

    -Seems like an interesting option...can leave at anytime and they say that there truly is no catch...
    -The commission split for a scratch is poor (from what I've read)

    -Needs 3 years experience, as stated on their website, but I'm guessing they make exceptions.

    Insurance Pro Agencies
    -Same thing as Iroquois, need 3 years IA experience

    Also, there is a forum member who typically posts on these cluster conversations who brings knowledge and poses questions and favorably hints towards his company, which he is a VP of. I'm interested in learning more about that company as well...i think they are based out of CO....I'm having a hard time finding his username ATM.

    So the long and short of it is....just looking to learn more about the opportunities for scratch IA's. It seems as if you are either giving up commissions or your giving up ownership or in some cases a little of both...

    To me the most important issues are:
    -Be competitive with the quotes, so I need access to the big carriers
    -Commission split, need to feed the family
    -Binding authority, I would greatly dislike having to wait hours, days for the underwriters to authorize a risk.
    -Control of the agency, total ownership, walk away anytime from cluster

    So I'm at a crossroads. It seems I'm going to have to sacrifice somewhere. The question is...where is it best to sacrifice?

    Mahalo Nui Loa :goofy: