SIAA vs. Cluster?

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SIAA vs. Cluster?

Postby qz4k5y » Mon Dec 14, 2009 2:39 pm

I am a new agent so pardon my ignorance. To get access to multiple markets what is the difference between joining a cluster or an associaion such as SIAA? Does anyone know the differences? Thanks.
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Re: SIAA vs. Cluster?

Postby SEANMYERS » Tue Dec 15, 2009 12:03 pm

can't speak for a Cluster but I belong to SIAA and so far so good. I will say that although belonging to SIAA, production requirements are less than if you had a direct appointment, company reps still get on your back which really *!!@!* me off.

You also have to get used to giving up a piece of the pie commission wise.

It is a good way to go if you do not have any alternatives and being able to offer client a quote yourself rather than waiting for a GA or Cluster is sometimes Golden!
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Re: SIAA vs. Cluster?

Postby qz4k5y » Wed Dec 16, 2009 5:42 am

Thanks Seanmyer for the reply.
What type of fee are you paying for membership if you don't mind me asking.
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Re: SIAA vs. Cluster?

Postby 99producers » Sun Feb 28, 2010 6:09 am

That depends on his "Down Payment", most likly he is paying $250 / $300 a month if he went with the standard amont down.
SIAA seems to be a very stable and well rooted company (which is very important to me). I am not a member agency but I am looking at their "Program".

-99producers
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Re: SIAA vs. Cluster?

Postby sacman » Sun Feb 28, 2010 2:15 pm

I'm about 2 weeks away from my three year anniversary with SIAA and there is not a single regret.
They were the perfect solution in switching from the captive agency side after 17 years.
Last year I made 25% more than when I left, and that is AFTER the fee.
The minimum commission on auto I earn is 15% and is as high 22%.
At the 15% rate, after the 10% fee, I still net 13.5% as opposed to the 10% which I earned as a captive.
I have NEVER had a company rep give me any issue about production levels. I guess that will all depend on the individual reps.
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Re: SIAA vs. Cluster?

Postby SEANMYERS » Mon Mar 01, 2010 12:09 pm

sorry for the delayed response in regards to what SIAA costs. Basically there is either a minimum of 2 - $300 p/m and/or 10% of the commission and perhaps a sign up fee. It's best to contact Steve Tague at 760-729-1143 and he can explain the current program. Tell him Sean from Daylight Insurance referred you if you want. I can vouch for the fact that they are an honorable outfit.
stevetague@tagueins.com
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Re: SIAA vs. Cluster?

Postby FFA » Mon Mar 01, 2010 1:33 pm

Seems E & O Carriers has issues with Clusters. Thats got to be a factor in your decision.
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Re: SIAA vs. Cluster?

Postby MODERN » Tue Mar 02, 2010 12:24 pm

Some carriers do have issues with clusters, but a few don't. There are some E&O carriers that understand cluster groups and will automaticly add your Master agency as an additional insured at no cost.
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Re: SIAA vs. Cluster?

Postby sacman » Tue Mar 02, 2010 3:32 pm

My SIAA master agent help me apply for my E&O.
They shopped it out for me as part of the service for a new agency.
I ended up going with Westport.
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Re: SIAA vs. Cluster?

Postby MODERN » Tue Mar 02, 2010 3:42 pm

Exactly, Sacman. Each SMA should have a list of carriers that they can send agencies to. Also, SIAA has a designated Strategic Partner specifically for helping their agents place their E&O.
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Re: SIAA vs. Cluster?

Postby toddoxley » Sun Aug 15, 2010 12:58 pm

I am also looking into the SIAA opportunity.. I like everything but the fact that they also have a 25% interest in the agency when and if in the future you sell the agency. Does the increase commisssion and bonus income make tis 25% a non-issue??

Todd Oxley
Triad Benefit Group Inc
Phoenix, AZ
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Re: SIAA vs. Cluster?

Postby FFA » Mon Aug 16, 2010 1:07 pm

I was told by one of my carriers that if I signed a cluster agreement, they would yank my contract. If you can not get direct, SIAA is the way.

For E&O, check out Brown & Brown out of California. Firemans Fund was very reasonable.
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Re: SIAA vs. Cluster?

Postby toddoxley » Mon Aug 16, 2010 1:26 pm

FFA, What do you know about SIAA having a 25% interest in all the business that is written through them.
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Re: SIAA vs. Cluster?

Postby sacman » Mon Aug 16, 2010 2:35 pm

Todd,

Each MA has the ability to tweak the contract and there is not a nationalized contract where they are all identical.
Therefore, I can't be 100% of the reading of your contract, but I can explain mine.
First the 25% is only on the GROWTH of the agency and is one of the reason that having the "frozen" amount in the contract is so important.
Say I came to SIAA earning $150,000 in commissions. This is my frozen amount that is subtracted from the monthly fees and the 25% departure fee. If I were to sell my agency or leave SIAA I would owe them 25% of the commissions in excess of the $150,000. Here is how it would apply.
1) I sell my agency: SIAA will buy my agency for twice the gross annualized commissions. Lets say that has grown to $250,000. My "penalty", for lack of better term, would be $250k-$150k = $100,000 X 25% = $25,000. SIAA will subtract the $25k from the ($250k X 2) $500,000 for a net proceed of $475,000.

2) Leave SIAA: The "penalty" is the same $25,000. Because I am keeping my agency, this payment is made directly to SIAA and there are payment schedules outlined in the contract. I believe there is a 20-25% down payment then monthly payments over 5 years for the balance. I admittedly am going from memory, so the payment schedule may not be accurate, but you get the gist of it.

For me personally, the benefits of SIAA have far outweighed any cost associated with joining.
In the first 7 months after joining I earned more in bonus than the admission fee. Now my bonus income is an additional 17% of my commissions. It's been about 6 months since I posted here that my 2009 income was 25% higher than my last year as a captive before switching to SIAA. My YTD 2010 income is up almost 35% from last year.

SIAA and my MA have delivered on everything they promised and I couldn't be happier. After being in the captive system for so long the thought of starting over and going independent was a scary, stressful decision. SIAA held my hand the enitre way, helped me get my contracts, E & O, comparative rater, and company specific training so I could hit the ground running. Because of their size, my bonus program and commission structure is better than I ever could have obtained on my own. They provided a valuable service to my agency in getting started, and continue to do so. Now they pretty much leave me alone. They ask that I attend 3 meetings per year. No production requirements, no hassling to sell life insurance or join marketing co-ops etc. If I have any questions, or need help of any kind, they are quick to respond. Of course, this says as much or more about my MA as it does SIAA, so investigate your MA and make sure you feel comfortable with them.

Best of luck
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Re: SIAA vs. Cluster?

Postby toddoxley » Mon Aug 16, 2010 4:13 pm

Sacman, I would like to speak with you by telephone regarding your former life as a captive. I have been a independent specializing in employee benefits for many years now. I need to switch our primary focus to commercial / personal line P&C and would like to talk with you about captive agents. I can be reached at 623-551-8671, or send me and email with your contact info, todd@triadbenefitgroup.com.
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