Should I accept Allied Appointment?

[antagent]

I have been running a little independent agency for almost 3 years with one appointing carrier. In order to expand this agency, I contacted Allied for new appointment. Allied sales director and manager came to my office for this matter. They
asked me to provide my agency value report and loss ratio report etc. to evaluate my agency and it seemed that we had great discussion about my business plan etc. But in the last minute, they wanted me to sign an additional agreement to allow Allied to quote all my current renewal policies in next 12 month once appointment completed. I must provide copies of declaration page of all my client policies to a Allied special team to make quote for me . As long as the premium lower than Allied's quote I should inform client that Allied will issue new policy instead of current one. I'm not comfortable about this agreement and haven’t signed that agreement. I want to take time to think about it. Imaging this situation: if all business of my current appointing carrier are really moved to Allied in 12 month, the sale manager of current appointing carrier would come to office to ask why and terminate my appointment. My plan is to grow my agency with multiple appointment carriers. It’s my decision to select which carrier to place business with and try balance among them. I don’t want lost current appointment while pleasing Allied for new appointment. I’d like to hear some advice from experienced agents in this forum.

[d's insurance store]

That sounds a bit too controling for my likes...it's as if they want to make you a captive agency to force the growth.

If you've been successful with only a solo appointment thusfar, then I would agree with you that to grow, you'll need some other outlets. That will require some research on your part to find a carrier that is both competitive and wants to work with you, acknowledging the title 'Independent Agency'.

If you've idenfitied Allied as the ONLY other competive market, then you might be in a pickle, but if there are other carriers that offer good rates, reasonable underwriting for your market and you've got a business plan that outlines growth strategies and your agency is growing and profitable within the confines of your current limitations, then I think at least one other carrier would be happy to have you represent them. The whole concept of being independent is being able to offer choices to potential clients and if you only have one controlling appointment, you're not really much better off than a captive like Allstate or State Farm.

If not, then at least look into working with one of the many MGA's or cluster groups that give you access to preferred and standard markets without volume requirements for a reduced commission. There are agencies that started with such arrangements and grew their placements large enough to get the carrier to take notice and then rolled those books into their own appointments.

[jackwehoca]

Allied will make you meet their quotas/goals, or odds are that they will drop you in a heartbeat. Then you will have to re-write all your business and hope that you can get it back, since Allied will be contacting your clients directly well in advance of the renewal date.
They do have some great rates but be careful what you agree to.

[InsureK]

Ant,
The others make very good points, but I think you made a very good point as well. I don't think it's in your best interest to tick off the carrier you have been working with for the past 3 years, who have seemingly helped you start and grow your business. I have worked a lot with Allied. They are a good company and have great contingency opportunity, but I would be very cautious at this stage in your career. If I were you, I would take D's advice and look into a cluster. Or ask Allied if you can sign up with out that additional agreement. As mentioned, they will probably have steep production requirements.

[MarketMaker]

I would caution that with the sole carrier, you have been successful, and that with Allied, they want to disrupt that success by taking business away from your loyal carrier, instead of just being satisfied with new production going forward.

You need to reward the currently-appointed carrier with your loyalty. They gave you a shot. There are other regional carriers out there that respect their agents who you should pursue for an appointment, who won't require big volume commitments, and who isn't seeking to cannibalize your current book.

This sounds like an affair with a homewrecker: She's new, she's pretty, but she also wants you to leave your wife. Once you do you might find that you have neither - your old carrier because your volume went south, and your new one because they still want more than you can give them.

[gregcw]

My recommendation is do not walk but RUN to the nearest exit. check out the other discussions in this forum on Allied. One is Allied Insurance -Agency terminations. Alied/Nationwide works four sides of the fence. Captive, Encubmered, Independent and direct. Their Captive is similar to Farmers in that you can place business outside of Nationwide but it has to not be eligible for Nationwide (they get to decide if it was ineligible after it is placed. The Encumbered are Independent? agents that recieve a subsidy while getting their business started, not a whole lot of difference from being captive, is it? Then you have the Independent Agents, whose coontracts do not contain a production requirement, unless you are the company who says that the Bonus Requirements ar a de facto production requirement. In Oregon, Nationwide was a direct writer with your agents name being One Eight Hundred until a few years ago they began opening by opening agencies in Oregon.

They have no respect either for you or your contract which clearly gives you ownership of your renewals. When you are terminated they will openly solicit your renewals in contravention of your contract!

So my strong recommendation is RUN to the nearest exit!

[CSP]

We looked into Allied. When it got down to signing up....They wanted us to 'roll' a $350,000 book the first year. New business didn't count. They didn't care if we put on $1,000,000 premium the first year in new business, it was the 'book roll' they wanted. Every account that came up for renewal they wanted us to send an application for new business and a copy of the existing policy. If we didn't meet this $350,000 threshold, they would cancel the appointment and they had the right to contact all clients marketed with Allied directly to keep them with Allied.

Quite frankly, it was not worth jeopardizing the appointments with some very good companies so that we had access to Allied for a few lines of business they had excellent prices on for now. We said thank you, but no thank you. If you change your policy in the future, we will think about it again.

[William Graham]

I see that there are concerns about Allied going back a couple of years.

Wonder if anyone has more information or concerns? We are looking to sign on - there is no book roll requirements
that were mentioned as troubling issues with them. We will have some modest new business requirements. We do not
look at them as a possible primary carrier for us but they may work into the third or so GWP for our agency based on info we are seeing from EzLynx quotes we have run. We belong to an SIAA Master agency group - so there is the protection afforded
by the national relationship with Allied.

[AgencyEquity]

I think there is a marketplace for everything and I think Allied fills a portion of this marketplace, but they are not my choice. I always preferred the companies that allowed me to underwrite the risk and trust me based on my loss ratio. Also being the lowest cost provider does not attract the best clients, I don't understand why so many of us fight over price as they are generally fighting over the worst clients. This is the market the Allied serves and I have no doubt it works for some agencies, it was not the type of clientele I wanted for my agency.

[insurancedad]

I was looking into Allied to add to my agency. Thank you all for the great input.

[rodgwag]

Run!