The Sky is Falling: Part 2

March 5, 2018

A 3-Part Article for SIAA Member Agencies: Part 2

Matt MasielloBy Matt Masiello, EVP & Chief Operating Officer

In part 1 of this article, I discussed changes coming to the insurance industry. Now let’s talk about SIAA and what we’ve done – and are doing – to meet the challenges associated with this evolution.

SIAA is NOT sitting idly by watching the industry evolve. We and your local Master Agency are incentivized by the GROWTH of YOUR agency. We are ONLY successful if you grow and succeed. We don’t win if you lose business, we don’t win if your agency shrinks, and we certainly don’t win if you don’t survive. Our model is built on the success of the overall member agency, your agency, not just placing business or receiving fees. Add to this the fact that your agency is your and your family’s livelihood, and that’s a BIG responsibility that we take very, very seriously. It’s pretty motivating.

SIAA is dedicated to being the future of the local agency distribution system. That’s a significant claim, so let’s back it up and get you in the loop.

  1. Collectively, we write $7.4 billion of insurance premiums. If we were one sole agency, we would be the third largest agent in the U.S. (and soon to be the second largest). You are part of a business model that writes a significant amount of the Strategic Partners business each year.
  2. SIAA member agencies write $3.5 billion in premium – 58% of our business – with Strategic Partner Insurance Companies. In 2018, we’ll collectively write almost $720 million of new business with these 23 insurance companies.
  3. We have over $800 million of E&S business and, in just a few short years, have consolidated $225 million with three Strategic Partner Wholesalers. This is opening new doors for all of us with specialty markets and programs.
  4. Our 7-year organic growth rate with Strategic Partner Companies is 76%. The organic growth rate of their TOP brokers over that same time is only 4.2%. Who looks good now?
  5. SIAA has signed over 6,700 agencies. We have helped over 4,200 insurance professionals realize their dream of owning an agency. More importantly, YOU (member agencies) are a significant distribution system for the Strategic Partners. YOU and your peer agencies have opened up distribution that carriers traditionally believed was too expensive to access or manage.
  6. We are investing in YOU and your local independent agency distribution system:
    1. SIAA has made significant investments in our Agency Foundation program, to bring in former captive and exclusive agents and help them build a sound business. We are going after that 40% personal and 12% commercial market share.
    2. We have had over 600 member agents complete the Business Insurance Advantage program, helping them develop or increase production efficiencies in commercial lines. In 2017, our small commercial growth will approach $130 million in premiums.
    3. We’ve launched dozens of SIAA member exclusive training programs in the Training & Learning Center to give principal owners and their staff the tools and skills to make the evolutionary steps.
    4. We’ve made available marketing tools, traditional marketing materials, seminars and webinars, direct mail, target marketing, websites, mobile apps and more. We don’t care if you use our stuff or not– we just want you to use something (and we try to make it easy for you)!
    5. Collectively, SIAA and the 49 Master Agencies have a field organization of over 120 insurance professionals – and it’s growing. We now have as many people in the field as most larger insurance companies…however, unlike the insurance company representative who is only looking out for their piece of the pie in your agency, our professionals WIN if you grow your entire agency and succeed. Yet another great partnership.
  7. The results of these services and benefits are not lost on our Strategic Partners. They view the resources that we provide to you, our member agents, as a benefit to them as well. These programs bring them new and better points of distribution and the services bring them better educated agents. Our field organization augments their field representatives, lowering their marketing expenses and remember – they’ll get $720 million of new business in 2017! SIAA assists these companies in managing a portfolio of local agents and a portfolio of books of business.
  8. Remember those ‘disruptors’ and ‘insurtech’ mentioned previously? Well, some of those folks tried to go directly to consumers only to realize they actually need traditional distribution. SIAA is implementing or piloting four of these platforms now. Also, believe it or not, our Strategic Partners are investing in these systems, but not for the reason you might think. They are doing it to learn what works (and what doesn’t). When they find something useful, they’ll apply it to benefit their successful distribution channel to make us even better. Several companies are openly sharing these initiatives and results with SIAA to keep us informed.
  9. MONEY: Everyone likes money and we are still a capitalist society, employing and paying over 16,000 insurance professionals in agencies as part of SIAA. This is due to the results we are generating with the Strategic Partners. Because of the benefit that we provide you, and the partner companies in managing the portfolios, we get paid more (more than standalone agents and more than agents who are part of other groups), and you get these funds. As an SIAA member agent you have five separate ways to earn money on your book: highest commissions available (paid directly on codes), local profit sharing, local bonuses/incentives, national quarterly FIXED bonuses and national year-end profit sharing!

You are part of the organization that is looking to go to the moon and plant a flag. Well, not the moon – but let’s collectively plant the flag as the proven local agency distribution system, with the best agents (advisors!) generating the best results and providing the best solutions to your community and clients.

Stay tuned for the 3rd part of this article where I discuss YOU, our Member Agencies, and actions you can take to be immersed in the evolution.