I thank everyone for responding to the SIAA thread as it yielded much useful information.
Wondering if the MGA route for a new agent is a good thing. I've heard good & bad from my associates on this one. Again, I have a financial planning practice that I am considering adding a p&c unit to target commercial but will, by neccessity, add personal as well.
Pros & Cons. Good & bad experiences. Any alligators that lurk under the water? Any referrals? Etc.
Thanks!
MGA's
Moderators: Josh, independent guy
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bindscott
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As a start up agency, you cannot avoid MGA's. Should consider approaching the following two:
Wholesaler: They are appointed by various standard carriers. They don't do any underwriting other than the usual review of the application that you submit. The application is then submitted to the carrier for consideration. All underwriting, issuance of policies are done by the carrier and the wholesalers normally do not have full underwriting authorities so don't expect them to utilize discretionary credits. They simply split the commission with you. Hence, the name wholesaler. Chaps your hide thinking that you have to split the commission but this is the only route that will allow you to offer carriers to your prospects and build your book.
MGA/MGU: Some call themselves as Managing General Underwriters. Does not mean they only do business with surplus lines carriers but traditionally geared towards substandard market. Some refer to them as E & S brokers. There are many classes that standard carriers won't entertain. MGA's/MGU's will facilitate those accounts. Usually they do most of the underwriting, quoting, binding and issuing policies. Some may have their own claims adjusters or have authority to settle up to certain amount of loss. Commission may vary depending on your production (10% to 17.5% on P & C, other than W/C, which is usually lower).
Start writing as many as you can with them. After about 1, 2 or 3 years, and you establish at least 1 MIL ++ in volume, you can start seeking direct appointments. In addition to volume, some standard carriers might consider your credit, experience in the insurance industry, how your agency is organized and managed (ie. agency management systems etc..)
Before going gung-ho about any particular MGA/Wholesaler, seek opinions from others who've dealt with them. The following should assist in deciding which GA to deal with:
1. Turn around time (Time is #1 important thing)
2. Commission and feee schedule (Depending on your state regulation, you may want to slap your own fee in addition to what GA's charge)
3. Programs they offer (Some GA's have exclusive/captive programs that no others have). Take advantage of these programs before your competing neighbors do.
4. Learn about the GA's carriers, policy forms and claims handling procedures (You do not want to be short changed or expose youir E & O) Ask for sample policies before proposing quotes to your prospects.
5. Compare quotes with two or more GA's even if it's by the same carrier (ie. Scottsdale, Lloyd's). Premiums will vary depending on GA's and the U/W you deal with. Just because it's quoted by the same carrier does not mean it's the same.
6. Talk to the U/Ws. Some are fresh out of college while others are Frank Sinatra's buddies. Dealing with inexepereinced U/W's will cause you to lose your prospect because they always have to to refer to their seniors to answer your questions. Try to establish close relationships with many seasoned U/W's.
Hope this helps. Good luck to you my friend!
Wholesaler: They are appointed by various standard carriers. They don't do any underwriting other than the usual review of the application that you submit. The application is then submitted to the carrier for consideration. All underwriting, issuance of policies are done by the carrier and the wholesalers normally do not have full underwriting authorities so don't expect them to utilize discretionary credits. They simply split the commission with you. Hence, the name wholesaler. Chaps your hide thinking that you have to split the commission but this is the only route that will allow you to offer carriers to your prospects and build your book.
MGA/MGU: Some call themselves as Managing General Underwriters. Does not mean they only do business with surplus lines carriers but traditionally geared towards substandard market. Some refer to them as E & S brokers. There are many classes that standard carriers won't entertain. MGA's/MGU's will facilitate those accounts. Usually they do most of the underwriting, quoting, binding and issuing policies. Some may have their own claims adjusters or have authority to settle up to certain amount of loss. Commission may vary depending on your production (10% to 17.5% on P & C, other than W/C, which is usually lower).
Start writing as many as you can with them. After about 1, 2 or 3 years, and you establish at least 1 MIL ++ in volume, you can start seeking direct appointments. In addition to volume, some standard carriers might consider your credit, experience in the insurance industry, how your agency is organized and managed (ie. agency management systems etc..)
Before going gung-ho about any particular MGA/Wholesaler, seek opinions from others who've dealt with them. The following should assist in deciding which GA to deal with:
1. Turn around time (Time is #1 important thing)
2. Commission and feee schedule (Depending on your state regulation, you may want to slap your own fee in addition to what GA's charge)
3. Programs they offer (Some GA's have exclusive/captive programs that no others have). Take advantage of these programs before your competing neighbors do.
4. Learn about the GA's carriers, policy forms and claims handling procedures (You do not want to be short changed or expose youir E & O) Ask for sample policies before proposing quotes to your prospects.
5. Compare quotes with two or more GA's even if it's by the same carrier (ie. Scottsdale, Lloyd's). Premiums will vary depending on GA's and the U/W you deal with. Just because it's quoted by the same carrier does not mean it's the same.
6. Talk to the U/Ws. Some are fresh out of college while others are Frank Sinatra's buddies. Dealing with inexepereinced U/W's will cause you to lose your prospect because they always have to to refer to their seniors to answer your questions. Try to establish close relationships with many seasoned U/W's.
Hope this helps. Good luck to you my friend!
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InsAgentSF
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Are you saying i won't become a millionaire by selling insurance??? -
bindscott
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broberts, do whatever pleases you. This is your thread. 
InsAgentSF, I never said you cannot become a millionaire by selling insurance. As a matter of fact, I know (not personally) few millionaires that made their money from the insurance industry. You most definitely can be a millionaire. The question is how soon.....
InsAgentSF, I never said you cannot become a millionaire by selling insurance. As a matter of fact, I know (not personally) few millionaires that made their money from the insurance industry. You most definitely can be a millionaire. The question is how soon.....
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bindscott
- Insurance Journal Addict
- Posts: 79
- Joined: Thu Apr 06, 2006 9:10 am
- Location: Los Angeles
- Contact:
SIAA?? I assume it's similar to ISU?
If you plan to join them, you should be ready to pay some dues. I can't tell you much about neither of the organizations but I think it would be best to build your book with wholesalers and MGA's and try them once you feel comfortable with membership obligation.
Good luck!
If you plan to join them, you should be ready to pay some dues. I can't tell you much about neither of the organizations but I think it would be best to build your book with wholesalers and MGA's and try them once you feel comfortable with membership obligation.
Good luck!