Agency Cluster Questions

[roxiepup]

Does it matter? 2k a month is a full time CSR or monthly lease for a nice office. Bottom line is SIAA is good for SIAA. All the crap about fighting for the small agency is crap. I know several local agency members looking to get out of SIAA. I would think twice before joining.

Yes, I think this is a factor for many agents. Some folks (like life and health specialists) will only want a certain sized p and c book.

To answer the person's question (even though it was directed to scooter), I think I can help with this despite f150s comments tearing down financial analysis done on a spreadsheet From the rough spreadsheet I did, It appears you would be making about 570k in commissions (NOT written premium) in p and c, and pay out rough estimate 2/k per month to the cluster (24k/yr) from that 570k. It isn't too bad, is it? Especially considering IF you join the cluster, you may be earning a higher commission tier then if you had direct appointments where commission percent is based on total written premium. Although at this high of a number, you would "probably" be at the highest yourself without the cluster, yes?

This does not factor in any bonus.

If you were making 570k in commissions, piib is the better deal financially as you'd be capped with their 850/mo flat fee. Compare with 2k. But, with piib, you pay that much right away your first year and ongoing....so how fast you will ramp in p and c is a big factor.

Hope that helps someone.

 

[scooter33]

Yes, I think this is a factor for many agents. Some folks (like life and health specialists) will only want a certain sized p and c book. To answer the person's question (even though it was directed to scooter), I think I can help with this despite f150s comments tearing down financial analysis done on a spreadsheet From the rough spreadsheet I did, It appears you would be making about 570k in commissions (NOT written premium) in p and c, and pay out rough estimate 2/k per month to the cluster (24k/yr) from that 570k. It isn't too bad, is it? Especially considering IF you join the cluster, you may be earning a higher commission tier then if you had direct appointments where commission percent is based on total written premium. Although at this high of a number, you would "probably" be at the highest yourself without the cluster, yes? This does not factor in any bonus. If you were making 570k in commissions, piib is the better deal financially as you'd be capped with their 850/mo flat fee. Compare with 2k. But, with piib, you pay that much right away your first year and ongoing....so how fast you will ramp in p and c is a big factor. Hope that helps someone.

If I was paying only 2K a month when I gross 570K a year, I would be doing backflips and get a tattoo of SIAA on my forehead. I am grossing less than half that. I'm telling you guys. SIAA is a scam.

 

[roxiepup]

If I was paying only 2K a month when I gross 570K a year, I would be doing backflips and get a tattoo of SIAA on my forehead. I am grossing less than half that. I'm telling you guys. SIAA is a scam.

Hmmm. Scooter. Hope you can help me understand where I'm so off! This is concerning.
The only way this seems possible is:

1. You have a different contract - the one I have drops to a 4% split pretty early on.
2. I've misread or misinterpreted the contract. Now I'm thinking I may have....I assumed the split percentages were based on annual commissions. Perhaps it is based on monthly commissions?
3. I've made some mathematical error on the spreadsheet. But I'm not seeing it?
4. Or, you are figuring in bonus vs straight commissions - this seems most likely, and I'm hoping this is the case as to make sense of things.... I know they take a big % out for bonus in comparison to straight commissions. But my understanding is you don't cut them a check for bonus - they pay you, in contrast to how commissions paid via carrier works. Maybe im wrong about that assumption? If for bonus you indeed write siaa a check too, then I see how you could be at 2k/mo with roughly 250k gross since percent cut to siaa is so much higher for bonus vs commissions.

Any of these seem applicable and if so, which ones?

----------

Hmmm. Scooter. Hope you can help me understand where I'm so off! This is concerning.
The only way this seems possible is:

1. You have a different contract - the one I have drops to a 4% split pretty early on.
2. I've misread or misinterpreted the contract. Now I'm thinking I may have....I assumed the split percentages were based on annual commissions. Perhaps it is based on monthly commissions?
3. I've made some mathematical error on the spreadsheet. But I'm not seeing it?
4. Or, you are figuring in bonus vs straight commissions - this seems most likely, and I'm hoping this is the case as to make sense of things.... I know they take a big % out for bonus in comparison to straight commissions. But my understanding is you don't cut them a check for bonus - they pay you, in contrast to how commissions paid via carrier works. Maybe im wrong about that assumption? If for bonus you indeed write siaa a check too, then I see how you could be at 2k/mo with roughly 250k gross since percent cut to siaa is so much higher for bonus vs commissions.

Any of these seem applicable and if so, which ones?

Ok yep, I reread things and I'm pretty sure i DID make a gross error in my assumption (#2 above). Sooooo, it is 10% based on monthly amount, not annual. It will be much harder to get down to the 4% commission in that case. So we will have to pay them more than I was thinking. Dang!!! That makes piib look even better unfortunately with a new, lower, breakebn threshold. Glad you said something scooter!!!

 

[scooter33]

Hmmm. Scooter. Hope you can help me understand where I'm so off! This is concerning. The only way this seems possible is: 1. You have a different contract - the one I have drops to a 4% split pretty early on. 2. I've misread or misinterpreted the contract. Now I'm thinking I may have....I assumed the split percentages were based on annual commissions. Perhaps it is based on monthly commissions? 3. I've made some mathematical error on the spreadsheet. But I'm not seeing it? 4. Or, you are figuring in bonus vs straight commissions - this seems most likely, and I'm hoping this is the case as to make sense of things.... I know they take a big % out for bonus in comparison to straight commissions. But my understanding is you don't cut them a check for bonus - they pay you, in contrast to how commissions paid via carrier works. Maybe im wrong about that assumption? If for bonus you indeed write siaa a check too, then I see how you could be at 2k/mo with roughly 250k gross since percent cut to siaa is so much higher for bonus vs commissions. Any of these seem applicable and if so, which ones? ---------- Ok yep, I reread things and I'm pretty sure i DID make a gross error in my assumption (#2 above). Sooooo, it is 10% based on monthly amount, not annual. It will be much harder to get down to the 4% commission in that case. So we will have to pay them more than I was thinking. Dang!!! That makes piib look even better unfortunately with a new, lower, breakebn threshold. Glad you said something scooter!!!

With the exceptions for minor details, all SIAA contracts are the same...nationwide. I have spent a lot of money and time reviewing this contract with attorneys, some of which are nationally known within the industry.

don't walk, RUN away from SIAA!

 

[FLInsa]

Wow, not even sure where to begin but here it goes:

1. Answering the OP's original question, for Scooter33 to have to pay $2,000 monthly to SIAA that would mean that Scooter33's Agency is earning about $20,000 NET COMMISSIONS monthly. That would also mean that Scooter33's agency is averaging about $200,000 in PREMIUM per month either through policies that are new business policies or renewal policies.

This would put the total BOB for Scooter33's agency at about $2.4 million. So there is your answer OP.

2. This is not directed at Scooter33 but if your P&C Agency has been in operation for 4-5 years and it only has produced $2.4 million in premium, something is not right.

5 years equals 60 months. 2.4 million divided by 60 = $40,000 per month in new business premium. At the 5 year anniversary of a healthy P&C Agency, the agency should have at the very minimum a 4 million BOB. Anything less I would be very much worried.

3. SIAA is not a scam and no, I am not paid by SIAA to endorse them or anything of that nature but to say that SIAA is a scam is really out there. I am at my 2.5 year mark with SIAA and soon approaching 2.5 million in premium and couldn't be happier. Do I like paying the monthly fees? Of course not! But would I have a 2.5 million BOB 2.5 years into this journey without access to the SIAA carriers? Highly doubt it.

Is SIAA the only good option available, no there are many options so do your due diligence because only you can determine what is right for your agency. To this point, I see people bashing SF and Allstate on this forum all the time but yet I personally know one SF Agent in CT that is a multi-millionaire so what is not working for some is working wonderfully for others.

4. The cost to break the SIAA contract is NOT "1/3 of the book" (at least not in my contract). But why break the contract and miss out on the profit sharing? If your Agency is profitable and growing it wouldn't make any sense to break the contract until your Agency reached a really large BOB (say 10+ million). At that 10 million mark I could see why someone would want out because you would be big enough to say "SIAA, you have helped me get this far but now here is your fee, I will keep my clients, and let's part ways".

5. You don't need a CSR if your BOB in under 3 million in premium. I will never hire a CSR that can't handle a 3 million BOB. Will there be exceptions, of course. If for example your BOB is loaded with contractors that needs certificates everyday, or loaded with clients that want to stop by your office to make monthly payments on their policy and etc - sure, you would probably need a CSR sooner but those are the type of clients that quite honestly I wouldn't want at this stage of my Agency because they suck out so much time for very little ROI.

Finally OP, what I would recommend you do is prior to signing up with ANYONE is ask the organization that you are signing up with for a list of agents in your area that they have a relationship with and call those agents and if possible stop by those agents office to really get an idea and full understanding of what is being offered to you and its costs/benefits.

Good luck.

 

[scooter33]

Wow, not even sure where to begin but here it goes: 1. Answering the OP's original question, for Scooter33 to have to pay $2,000 monthly to SIAA that would mean that Scooter33's Agency is earning about $20,000 NET COMMISSIONS monthly. That would also mean that Scooter33's agency is averaging about $200,000 in PREMIUM per month either through policies that are new business policies or renewal policies. This would put the total BOB for Scooter33's agency at about $2.4 million. So there is your answer OP. 2. This is not directed at Scooter33 but if your P&C Agency has been in operation for 4-5 years and it only has produced $2.4 million in premium, something is not right. 5 years equals 60 months. 2.4 million divided by 60 = $40,000 per month in new business premium. At the 5 year anniversary of a healthy P&C Agency, the agency should have at the very minimum a 4 million BOB. Anything less I would be very much worried. 3. SIAA is not a scam and no, I am not paid by SIAA to endorse them or anything of that nature but to say that SIAA is a scam is really out there. I am at my 2.5 year mark with SIAA and soon approaching 2.5 million in premium and couldn't be happier. Do I like paying the monthly fees? Of course not! But would I have a 2.5 million BOB 2.5 years into this journey without access to the SIAA carriers? Highly doubt it. Is SIAA the only good option available, no there are many options so do your due diligence because only you can determine what is right for your agency. To this point, I see people bashing SF and Allstate on this forum all the time but yet I personally know one SF Agent in CT that is a multi-millionaire so what is not working for some is working wonderfully for others. 4. The cost to break the SIAA contract is NOT "1/3 of the book" (at least not in my contract). But why break the contract and miss out on the profit sharing? If your Agency is profitable and growing it wouldn't make any sense to break the contract until your Agency reached a really large BOB (say 10+ million). At that 10 million mark I could see why someone would want out because you would be big enough to say "SIAA, you have helped me get this far but now here is your fee, I will keep my clients, and let's part ways". 5. You don't need a CSR if your BOB in under 3 million in premium. I will never hire a CSR that can't handle a 3 million BOB. Will there be exceptions, of course. If for example your BOB is loaded with contractors that needs certificates everyday, or loaded with clients that want to stop by your office to make monthly payments on their policy and etc - sure, you would probably need a CSR sooner but those are the type of clients that quite honestly I wouldn't want at this stage of my Agency because they suck out so much time for very little ROI. Finally OP, what I would recommend you do is prior to signing up with ANYONE is ask the organization that you are signing up with for a list of agents in your area that they have a relationship with and call those agents and if possible stop by those agents office to really get an idea and full understanding of what is being offered to you and its costs/benefits. Good luck.

It is not possible to run an 2+ Million agency without a CRS or other help in your agency. 4 million in premium after 5 years... You will hit the top 100 agencies in no time! Good for you. You do understand at the size of 4 million, carriers would be begging to have a contract with you. Also, depending on your growth and loss ratio you get 100-150k in bonuses from the carries... Without paying anyone monthly. Glad you are drinking the SIAA koolaid. Trust me... It's just a matter of time when you will be looking to get out.

 

[biaomaha]

Wow, not even sure where to begin but here it goes: 1. Answering the OP's original question, for Scooter33 to have to pay $2,000 monthly to SIAA that would mean that Scooter33's Agency is earning about $20,000 NET COMMISSIONS monthly. That would also mean that Scooter33's agency is averaging about $200,000 in PREMIUM per month either through policies that are new business policies or renewal policies. This would put the total BOB for Scooter33's agency at about $2.4 million. So there is your answer OP. 2. This is not directed at Scooter33 but if your P&C Agency has been in operation for 4-5 years and it only has produced $2.4 million in premium, something is not right. 5 years equals 60 months. 2.4 million divided by 60 = $40,000 per month in new business premium. At the 5 year anniversary of a healthy P&C Agency, the agency should have at the very minimum a 4 million BOB. Anything less I would be very much worried. 3. SIAA is not a scam and no, I am not paid by SIAA to endorse them or anything of that nature but to say that SIAA is a scam is really out there. I am at my 2.5 year mark with SIAA and soon approaching 2.5 million in premium and couldn't be happier. Do I like paying the monthly fees? Of course not! But would I have a 2.5 million BOB 2.5 years into this journey without access to the SIAA carriers? Highly doubt it. Is SIAA the only good option available, no there are many options so do your due diligence because only you can determine what is right for your agency. To this point, I see people bashing SF and Allstate on this forum all the time but yet I personally know one SF Agent in CT that is a multi-millionaire so what is not working for some is working wonderfully for others. 4. The cost to break the SIAA contract is NOT "1/3 of the book" (at least not in my contract). But why break the contract and miss out on the profit sharing? If your Agency is profitable and growing it wouldn't make any sense to break the contract until your Agency reached a really large BOB (say 10+ million). At that 10 million mark I could see why someone would want out because you would be big enough to say "SIAA, you have helped me get this far but now here is your fee, I will keep my clients, and let's part ways". 5. You don't need a CSR if your BOB in under 3 million in premium. I will never hire a CSR that can't handle a 3 million BOB. Will there be exceptions, of course. If for example your BOB is loaded with contractors that needs certificates everyday, or loaded with clients that want to stop by your office to make monthly payments on their policy and etc - sure, you would probably need a CSR sooner but those are the type of clients that quite honestly I wouldn't want at this stage of my Agency because they suck out so much time for very little ROI. Finally OP, what I would recommend you do is prior to signing up with ANYONE is ask the organization that you are signing up with for a list of agents in your area that they have a relationship with and call those agents and if possible stop by those agents office to really get an idea and full understanding of what is being offered to you and its costs/benefits. Good luck.

Very good post and almost mirrors my situation and thoughts

 

[FLInsa]

It is not possible to run an 2+ Million agency without a CRS or other help in your agency. 4 million in premium after 5 years... You will hit the top 100 agencies in no time! Good for you. You do understand at the size of 4 million, carriers would be begging to have a contract with you. Also, depending on your growth and loss ratio you get 100-150k in bonuses from the carries... Without paying anyone monthly. Glad you are drinking the SIAA koolaid. Trust me... It's just a matter of time when you will be looking to get out.

"It is not possible to run an 2+ Million agency without a CSR or other help in your agency."
After 19 years in the P&C industry which includes working for some large agencies where not only you were expected and paid to handle a 3 million preferred BOB, you were also expected to cross sell whenever possible so yes, it is very much possible and that is what many (if not most) what the larger agencies do.

4 million in premium after 5 years... You will hit the top 100 agencies in no time! Good for you.
Thank you but getting into the list of the Top 100 Agencies (Top 100 Property/Casualty Agencies) isn't a realistic target yet since I would need about 85 million in premium to join that list so I will have to settle in the meantime with a more modest goal/target of hitting 10 million in premium in 10 years time.

You do understand at the size of 4 million, carriers would be begging to have a contract with you.
Unfortunately this is so not true - at least not in Florida. Does it become easier as you grow to get appointments directly, sure, but I am not expecting nor holding my breath that a national carrier will knock my door down "begging" me to accept their appointment. I do wish that was the case though.

Glad you are drinking the SIAA koolaid. Trust me... It's just a matter of time when you will be looking to get out.
Well, I am not drinking anyone's koolaid except after 19 years in the P&C business I know for a fact that one of the major reasons P&C Agencies fail is due to lack of access to competitive carriers and SIAA fixed that problem for me. Is it the cheap and do I like paying what I pay, no. But I also do try to keep in perspective though that had it not been for the SIAA carriers my BOB wouldn't be half the size of what it is today for sure.

And will a time come when "I will be looking to get out" of the contract? Sure, I suspect that that time for me will be when I reach 10 million in premium. And when that happens I will simply say "thank you SIAA, here is the fee for breaking the contract and let's part ways". I will keep my clients and my direct appointments and everyone is happy - SIAA will have made whatever money they made over me and I will be happy that I will then be able to scratch out a living.

 

[888leads]

Well said FLInsa, thanks for sharing and can't agree with more.

 

[Gulliver]

Also check out Premier Group out of Colorado. They have some agents in California. Similar contract to SIAA but with full ownership at exit from what I can see. They also share more of the profit sharing and have about the same carrier access.



I have always liked the surface of SIAA but the more I see the more I lean toward others such as PGI. Good Luck

Gulliver