$200,000,000 TIV Multifamily Portfolio

Discussion in 'P&C Insurance Forum' started by samb, Aug 30, 2017.

  1. samb
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    samb New Member

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    I work for a real estate investment group that has a $200M TIV portfolio. Once I get my P&C license I plan on becoming a captive agent for Travelers or a similar company. I have several questions (which will probably lead to more questions).

    1. The general idea is for the real estate investment group to save money on commissions by bringing it inhouse. In my pre-licensing class, I was told I can't share commissions with anyone who isn't licensed. So let's say the annual premiums are over $600k and I make $60k in commissions, how can I save the company money by splitting the commissions with them? Can I lower my commission amount? Obviously, I don't want to do anything unethical or illegal.

    2. I need to get licensed in 7 states, should I do that before I speak to a Travelers rep or should I speak with one right after I get my Resident License?

    3. Do I tell Travelers I work for this company and have access to these properties? Is it a conflict of interest? I technically get paid as a 1099 through the management company and each property is owned by a different LLC so I think it is ok but I'm not sure...?

    Thanks in advance for all the help and info.
     
  2. BADTROUT
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    BADTROUT Super Genius

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    Several things to address here...

    1. It looks as though you are assuming Travelers will just appoint you because you are licensed. Having the license helps, but appointments are getting more difficult and they may steer you to a cluster or a group of some kind to gain access. If you do, I suggest Horizon Agency Systems for many reasons.

    2. If you are the responsible agent (when you get licensed) it would be very easy to get the business entity licensed so long as you are in their employ (hint at job security) you can split all the commissions you like with them.

    3. I understand each one is a different LLC, would it be helpful to just split commissions with one of them, or the main one then they can distribute their savings.

    4. What states are you in? You may be able to write a master policy, with each of the LLCs as Named Insureds if the same master company wholly owns each LLC.

    5. Working as a 1099 selling Travelers or the like would make you an independent agent, versus a captive. Even if you choose to only represent one carrier, your still independent.

    6. Best of luck on your licensing! This is a great business to be in, and it sounds like you have a great headstart on writing the business. I would ABSOLUTELY wait until you are licensed to talk to a representative., and then, I would absolutely talk to the Travelers Marketing rep before doing all of the non resident licensing.
     
  3. Arnage150
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    Arnage150 Guru

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    Sounds good in theory, probably not that easy to execute.
    What does Travelers get by appointing you? They already have your business. All they are going to do it piss off the agent that currently has your business and jeopardize a relationship.
    You also don't offer any growth potential after the initial 600k in business is moved over. Yea you may pick up a few new buildings every year but they are looking for weekly production.

    If I were you I would just get licensed and find a broker willing to give you a kick back of 1/2 the commission.
     
  4. InsCommentary
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    InsCommentary Super Genius

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    A newly licensed individual solely responsible for insuring $200M in property plus liability, auto, crime, WC, etc. is daunting. Have all parties thought this out to save a few thousand dollars in commission income if there will actually be any savings? There are lots of facts missing from this discussion that are material.
     
  5. myfakename
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    myfakename Expert

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    In Arkansas this is frowned upon. Only a certain % of your business can be "controlled" business to keep this exact scenario from happening.
     
  6. InsCommentary
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    InsCommentary Super Genius

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    Good point. It's the same where I am. I believe it's 25%.
     
  7. VolAgent
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    VolAgent Guru

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    If they go to Travelers, or any company and their business model is this one portfolio they will politely be shown the door. There is absolutely nothing to gain here. A brand new agent, only one account and no plans to get more? No one is going to get excited about that.
     
  8. jemelton
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    jemelton Guru

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    Brilliant move to have a newly licensed agent to insure 200 mil of property so they could save a few thousand bucks. They could probably save 60k by shopping and finding a carrier that was agressive on pricing.
     

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