The Difference between
SIAA (The National Insurance Agent’s Alliance)
ICA Agency Alliance, Inc. (Master Agency for SIAA)
and other Cluster/Aggregator Groups!!
Most independent insurance agent Aggregator and Cluster groups are formed for basically one purpose. That purpose is to take a group of individual insurance agents, or cluster of smaller agencies, and combine the insurance premiums of all to make one large agency book of business. This is typically done to create a bigger book of business under one aggregated producer code to receive extra profit sharing bonus monies [depending upon the group - this money may or may not be passed down to its members]. It also provides access to markets that are unavailable to smaller agents, but always for the benefit of the group’s organizer. Beyond these limited items, there are often little, or no other services or benefits offered or available to the members. This article offers a comparison to the differences between SIAA/ICA and other Aggregator/Cluster type groups.
At SIAA (Strategic Independent Agents Alliance) and ICA Agency Alliance, Inc., its local representative, the concept of the insurance group is much more complex. Why? For one very important reason. SIAA is the largest Independent Insurance Agents group in the country, starting in 1983, and currently writing $8.5 Billion in total property/liability insurance premiums. With its size and national recognition by its partner insurance companies, SIAA affiliated member agents have access to the best markets with the highest relationship stability of any agent group. SIAA is in constant contact nationally with its partner insurance companies at the corporate level, and ICA is in very close contact with the local marketing and underwriting offices. Most other Aggregator/Cluster groups do not have this close working relationship with their insurance companies on the national level.
Here are some of the differences between Aggregators/Clusters and SIAA/ICA:
- ICA’s mission, when you join, is not only to make you a true Independent insurance agent and/or agency owner but also a real business entity that has a financial value far greater than just the income value of your annual commissions. You own your own business, your agency, your commissions and operate under your name exclusively and not SIAA or ICA. Your clients see that they are working with the person in control of the agency. SIAA/ICA works behind the scenes with our mutual partner companies to get your agency’s own direct primary producer sub-codes, so you can work directly with the companies. The policies will have your agency’s name on the declaration pages. Your agency will work directly with underwriting, marketing, claims and service departments of the insurance companies. You will receive commissions from the insurance companies paid 100% directly to you for the business you have issued. You won’t have to wait the extra time for the aggregator/cluster group to decide which policies are yours and then have to wait for the group on when they want to pay you. You will remit to ICA one of the smallest fees in the industry for the benefits SIAA/ICA provides to you 30 days after you receive your commissions. Any questions on commission payments will be between you and the companies, not ICA. And, most importantly, because you are operating as a viable business entity when it comes time to retire or sell your business, the “agency business entity” will have a value greater than just the annual income flow of your commissions. Often, the value is 2 times or even as much as 3 times the annual revenue and - SIAA/ICA has made the transfer/sale the easiest and fastest transaction in the insurance agency business.
- Virtually all primary preferred insurance markets and many surplus lines brokers pay either profit sharing, supplemental commission payments or both to SIAA/ICA and other Aggregators/cluster groups. SIAA/ICA pays a very significant amount of these supplemental payments to its members for the business they write. SIAA receives the supplemental commission payments from its national insurance company partners and distributes payment through ICA to its member agencies. These payments are paid by the insurance companies quarterly. ICA makes the national supplemental growth and retention payments between 8 and 9 times each calendar year to its member agencies, and profit sharing override once a year in the second quarter. Virtually all local and regional Aggregators and Clusters do not receive national payment overrides. Many larger and national Aggregators/Clusters do receive these payments and most do not offer their members any part of the compensation benefit.
- ICA also pays its members their proportional share of national annual profit sharing received from SIAA if the agency’s loss ratio is less than 60%. National Profit sharing is paid annually in the second quarter. Again most national Aggregators and Clusters do receive these payments, and most do not offer their members any part of the compensation benefit.
- Most groups, including SIAA/ICA, receive local profit sharing as well and occasionally some supplemental commission payments when earned from the companies. ICA will pay a proportionate share of its earned payments to its members. Payments are made by ICA for local supplemental payments without a loss ratio limitation. Where specific insurance company profit sharing agreements are earned by ICA, and a member has a direct primary sub-code and a loss ratio of less than 60%, the member agency will receive its proportionate share, not as part of a payment from the collection of all companies, but rather from each specific company. Aggregators/Clusters are very inconsistent in how they distribute local payments, and some do not pay any amount. It is important to know ahead of time how these payments are earned and paid before signing a contract with the Aggregator or Cluster.
So what other benefits does SIAA/ICA offer in addition to markets and extensive multiple compensation levels?
- For new agents to the independent side of the property and casualty insurance business, including former captive agents, ICA offers the SIAA Foundation program helping members complete the details of starting a new agency business. The Foundation is a multi-tiered approach to assist members in getting their agency up and running with daily business operations as quickly as possible. The Foundation also assists in setting up your new office, securing the lowest cost “Insurance Agents Errors and Omission” insurance coverage in the industry, securing the state required “Cyber Liability” insurance coverage with the best insuring agreement and lowest cost, initial training on the personal lines rating system of EZ-Lynx and much more. The agent is also given the ICA exclusive 5-day 5-hour quick training program, at no cost, to learn how to immediately start selling either personal and/or commercial insurance policies or both, through ICA’s Training, Education, and Marketing departments. Most aggregator/Cluster groups may offer some start-up advice and high priced 3rd party vendor access for quoting personal insurance. ICA spends more time, effort and money than almost all other groups in establishing their member agency’s brand and growing their business venture.
- All member agencies of ICA are entitled to receive all of the full and advanced training, education and marketing services at no additional cost, including continuing education credits from our approved courses. The ICA’s local Training department is the most unique and comprehensive program offered by any insurance group or insurance company in the country. Its training and education department teaches insurance coverage, helps agents put applications together and present the risk to the underwriters, helps secure the quotes and evaluate the best market for the client, helps put the extensive personalize coverage proposal together and give the member tips and techniques to help sell the policies. The training programs are designed for beginners to experienced agents offering basic instruction on very complex accounts. It includes the entire preparation and selling process to assist member agents in growing their business, as quickly as possible, reaching their financial and success goals.
- If ICA does not offer enough additional services and benefits to its member agencies, SIAA is there with a whole collection of additional programs and services.
- SIAA is also providing an ever-growing list of proprietary insurance products available exclusively to member agencies and other specialty programs that offer supplemental compensation and direct access with a dedicated staff.
- SIAA and ICA are also on top of the rapidly changing insurance markets to keep pace with the new technologies, changing customer buying trends, new digital markets (often available only to the largest producers of insurance business) and other events yet to happen. SIAA is associating with a number of innovative digital companies to give member agencies a head start in the new age of insurance sales. What other Aggregator/Cluster groups keep their agents on the cutting edge of changes in the industry better than SIAA? They usually don’t. SIAA and ICA are continually updating and upgrading their offerings to their member agencies.
In conclusion, there is no comparison to the benefits, market access, compensation, education and training offered by SIAA and ICA Agency Alliance. Together, SIAA and ICA have the only true member-centric group/alliance available to the independent insurance agency who wants to affiliate with a larger association of insurance professionals. Aggregators and Clusters may tout their low cost of participation compared to SIAA/ICA, but in fact, they are really much more expensive with far less autonomy of the member’s independent insurance agency.
An established and successful ICA member agent is usually earning much more than 100% of the gross commissions on his or her agency even after paying costs associated with membership – making ICA member agents some of the best-compensated agents in the property casualty insurance business. Couple the Income Opportunities with the Education, Training and Marketing assistance, all other benefits provided by SIAA and ICA, and the best business transfer method when it comes time to close out the membership contract, there really isn’t a better association decision an agent can make to reach the financial success of his or her insurance agency business venture.