A typical SIAA Member Agency and why they join the national alliance

November 17, 2016

What type of agency joins SIAA and why do they stay?

SIAA is frequently asked what the typical member agency looks like, or phrased another way — what type of agency owner or producer most often decides that SIAA is the best option for them to pursue their dream of independently owning and growing their own agency?

The truth is, after working with multiple generations of agencies, the SIAA model has grown to serve the needs of more than one type of agency.  While that adds complexity to telling the SIAA story, it does help explain the size and success of the national network.

In the spirit of providing an answer to one of SIAA’s frequently asked questions, the “typical” SIAA member agency can be loosely categorized as one of three types:

  1. Exclusive agent or producer looking to start their own agency
  2. Existing agency looking for help to stay competitive and grow their business
  3. Veteran member agency who voluntarily retains their membership

The needs of these three types of agencies vary considerably, and the factors that make SIAA the right choice for each of them will also differ.

Let’s examine these three types of SIAA member agencies, what may make them decide to join SIAA and what ultimately makes them decide to stay.

SIAA Member Type #1 – Start-up Agency

Over the last 20 years, SIAA has helped create over 3,650 new independent insurance agencies. Often a captive insurance agent, otherwise known as an exclusive insurance agent, is seeking to offer clients policies from multiple insurance providers, as well as earn higher commission rates and profit sharing.  On occasion, SIAA is asked by the exclusive agent to weigh-in on possible contractual matters that may come into play as they contemplate untangling themselves from their exclusive arrangement, better enabling them to make this significant step into independence.

Unlike many other networks, SIAA is also open to helping experienced producers transition from employee to realizing their dream of agency ownership.  Starting a small business is a significant undertaking for any entrepreneur, and first-time agency owners face the additional challenge of needing access to insurance company partners. Providing intense foundational support to first-time business owners is something SIAA is uniquely positioned to offer, following a proven methodology that has worked for a high percentage of the 3,650 start-up agencies that have preceded them.

SIAA Member Type #2 – Existing agency owner making a strategic pivot

While a little over half of SIAA’s 6,000+ member agencies were start-ups, the other half were established agencies. As the industry has experienced many shifts due to a multitude of regulatory, economic and technological factors, so too has the “freshman class” of SIAA member agencies over the years.
Access to companies, increased commissions and profit sharing revenues have always been attractive reasons to consider joining any type of insurance network.  As we witness more carriers’ appetites and commission structures changing, these remain compelling factors as agency owners navigate diminishing revenues from the traditional way they operate their business.

Hence, the arrival of an unprecedented number of clusters, aggregators and other networks in the industry, each making their own deals with insurance companies and offering a wide range of agreement structures. Many agency owners who are opting for SIAA over other options reference the network size and stability, as well as the ability to take their book with them (if they decide to leave) as key determinants in making their choice.

New SIAA member agencies also enjoy having access to a range of support services. Depending on their background and circumstances, which of those is most important will differ. Agencies looking to start or grow their commercial book find SIAA’s Business Insurance Advantage program attractive, while those that are wrestling with agency perpetuation issues appreciate the resources to specifically address the issue. Most recently, we are seeing a growing number of existing agencies looking for alternative markets as companies’ appetites change and their customers are receiving non-renewals. SIAA’s MarketFinder is just the answer to this growing challenge.

SIAA Member Type #3 – We don’t need you, but we love you

On paper, the longer an SIAA member stays in the alliance, the easier it is to leave. Unlike many other network arrangements, clients and companies of SIAA member agencies are theirs – always. Veteran SIAA agencies, some decades-long members, are profitable and well established in the communities they serve. Many have multiple locations and are well-staffed. They tend to enjoy and utilize the alliance resources available to them, including SIAA MarketFinder, Marketing, Training, Book Management and other operational support services.

But where does the rubber meet the road? Like any successful business owner would, they do the math and it is pretty simple – when the revenue is greater than the expenditure, it’s a pretty sound investment.

Closing on a Disclaimer

Every situation is unique, and the best solution will be as well. SIAA does not claim to be the best fit for every current or future independent agency (in fact, we estimate that 1 in 10 will be a good fit). However, SIAA does remain steadfastly dedicated to the creation, retention and growth of the independent insurance agency distribution system. Collectively, SIAA members write over $6.3 billion in premium across 48 states, making it the largest insurance agency alliance in the nation.