Superior Access Vs. Smart Choice

[ChicagoProducer]

Kenn, so tell us about SA's start up/ongoing costs.
I've looked into Smart Choice: $199 EZLynx set-up and $105 per month for ongoing access and up to 5 users. Also a 70/30 split. No other costs. They have a 2year non-compete. Eventual direct appointment possibility.

So, is it SA or SC?

 

[shawnmwalker]

70/30? Yikes!!!!!!!

 

[nyc2phi]

Smart Choice offers the option to use them as a wholesaler. There is no non compete with this method. It works for me since I have a direct carrier that I put most of my business with, the carriers I have through smart choice are a backup for me incase I need them. As my agency grows, the more carriers I can bring on direct without Smart Choice.

 

[shawnmwalker]

No comment...other than, Does this create an environment of "Adverse selection" for the Smart Choice carriers you get access to? Seems like it to me.

 

[nyc2phi]

No comment...other than, Does this create an environment of "Adverse selection" for the Smart Choice carriers you get access to? Seems like it to me.

Shawn most of the time my direct carrier is more competitive than the carriers Smart Choice has. If Smart Choice the better option then yes I place the business with them, thus still growing my book. Where I'm located 90% of the time I don't need to place it with their carriers. It's not like I'm getting a more competitive rate with Smart Choice and only offering my direct..

 

[indienoise]

No comment...other than, Does this create an environment of "Adverse selection" for the Smart Choice carriers you get access to? Seems like it to me.

I think that question would be more relevant if all other things were equal. However they are not. In my agency I have carriers who download, carriers who don't. carriers who pay very well and carriers who don't pay that well. carriers I get contingency checks from and those I don't. I could probably think of a dozen other variables but you get the point. There is always an element of adverse selection when you are choosing a carrier to do business with. So what?

 

[shawnmwalker]

Maybe a good new thread here. From your perspective, "so what" is normal from the agency owners perspective.

From a carriers perspective, an environment where they are being adversely selected means higher LRs, higher rates to stay in the game, lower commission to keep rates in ball park. If a carrier can control, to the extent possible, the agencies in which there is adverse selection then they can control, to the extent possible the......

If I am putting all my good stuff with my direct carriers because I don't have to split the commission.... I need to put my good stuff with the direct carrier contract I am trying to protect then what naturally happens to the carriers (Not Direct) that get my agencies table scraps?

There is a good point made by the previous post. All the variables listed above create an environment of adverse selection to some extent.

 

[shawnmwalker]

That's very Astute of you Ins1923! I think you are on to something.

Like it or not we have a symbiotic relationship, here. We need each other!

 

[indienoise]

the whole IA setup places carriers in an interesting predicament, I've always thought. Take my relationship with progressive, for example. They mainly get nonstandard or borderline standard type business from me. Since they are competing with a bunch of other carriers, they typically only win when their premium somehow turns out to be roughly half of what it would be the vast majority of the time. So they get rewarded with a much higher likelihood of unprofitable business, since they're not getting the chance to make up for it on higher premium cases. I mean, somehow it still works out to be profitable in the end, but we are kinda setting them up to take a hit, ya know? I know the idea is they set rates based on the risks they want, but still...

 

[benneaf]

This has been a very interesting thread. Despite it being a few years old it still sounds germane. I am a life and health guy looking to move across the waters and jump into the P & C world. I have a Medicare trail, but will be building from scratch on the P & C side. After my first year in the business as a captive agent I now guard my commission trail very closely. From everything I have put together I can own my trail with Superior. They can help me learn the business. I'll have some annual fees, but can move my book on down the road if I want. Most everyone else I am running into that will work with new agents doesn't let us own the book. As per 1822 above this industry is a bit crazy...not just the P & C side, but also the L & H side too! Any comments or input is appreciated!