Point of Clusters and Agents Leaving

Discussion in 'General Insurance Agent Discussions' started by neb1970, Dec 25, 2016.

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  1. neb1970
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    neb1970 Expert

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    I'm not in the business so I am probably 100% off here, but why don't independent agents sign up with clusters, use them to get directly appointed, and then immediately leave with those direct appointments and go be 100% independent with no commission split or fee? Sure it might cost them an initiation fee, but that is probably worth the cost to get access to a cluster carriers with no commission split long term. What am I missing?
     
  2. VolAgent
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    You don't suppose the clusters haven't thought of this and put steps in place to prevent it or make it very expensive?
     
  3. neb1970
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    neb1970 Expert

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    Absolutely, I would assume that is why there is an initiation fee and exit penalty to most clusters. But if the initiation fee is only a few thousand and exit penalty small, wouldn't it still benefit the iA to make the move and also benefit the cluster because they are receiving $ for a 3 month service?
     
  4. VolAgent
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    If it worked that way, sure.
     
  5. mattupthehill
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    I assume it may also have something to do with direct appointmenthaving sales requirements that the IA can't meet ( especially if more than one carrier has those min. thresholds). That may not be an issue with a cluster, can't speak for certain, though.
     
  6. WillC
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    Carriers are interested in clusters because of aggregate volume; they are increasingly uninterested in the volume generated by a single agent or even a standalone agency of once-meaningful size. So the cluster's core value is its ability to provide enough business to be important to the carrier.

    Leave and fly solo -- the agent is again a tiny-volume player in a world increasingly ruled by giantism.
     
  7. bobson
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    What makes you think you can get a direct appointment if you just joined a cluster?
     
  8. shawnmwalker
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    Very interesting Conversation.

    Volagent got it. If a Cluster takes, for example, 10% of your pie. If the contract lets you out early, then they get 10% of a Pie that never gets large enough to repay what they do for you by way of Training (PL and CL), carrier access, and Additional Comp.

    It would be foolish to provide all that to get 10% of one years commissions on a ____k book generating 15% in Commissions. (10% of that is $____ ----- not enough to be in the business of aggregation)



    Some might let you in and out very quickly but then ask yourself what did they provide you to allow that. (Probably no training. Access to carriers, but only under the house code- not directly contracted, Maybe no binding authority, etc. etc.)

    Some might profess to let you out quickly but then the contract says, "You can't have a relationship with any carrier we got you for two years."

    For them to allow it, means them cutting most deliverables a cluster ought to provide.

    Good points in this thread. I like the comments right before mine as well. and WillC's Comments.
     
  9. Rileyr7
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    Rileyr7 New Member

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    My name is Ryan and I'm the Regional Director for SIG one of the fastest growing organizations targeted to provide simple and easy solutions for independent agents like yourself.

    What I do is help close a gap, for agents like yourself that don't necessarily have all the carriers, and market access that they need. Here at SIG,
    *I can offer 100% Book ownership with any business placed and or written with us.
    *Along, with that comes 50+ Carriers that ensures you'll never miss another deal
    * BINDING AUTHORITY,*
    *Fully integrated agency management system and comparative rater and we do it all for FREE! Yes, FREE!

    Now you can see why we are so busy, helping partner with captive and independent agents like yourself.* We are not a catch all for all agencies, we want to ensure that we're selective with whom we partner with given the carrier access and quite frankly the benefits of the program.

    If you'd like we can schedule just a 10 minute call to go over how a call can revolutionize your business and help educate you on what quite honestly you don't know is available.

    Kind Regards,

    Ryan Riley
    Regional Director SIG
    530-638-6999
     
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