A Small Agency ?

[Scottyj]

So I heard something from a well established agency owner here in my local Utah market during a conversation and it worries me.


He said that the average agency book here is between 1 to 4 million in premiums... My agency is very new to the state and literally 98% of the agencies are15 years or older, I started asking around and his statement so far is correct save the two local giants of leavitt group and Buckner.

our California office with two agents is about 15 million after 20 years but these local agencies usually have 3 or more in their staff.. And only 1 to 3 million to show for it. Do these figures hint at a slow growth projection ?

I know population is a factor but what do you think? I am still very new, in my second year and started in a market we really knew nothing about, my book growth is about 50% of what my brothers was when he started in 1992 in California in his first year... I know different time periods different economy, any thoughts or similar experiences or situations in anyone else's market ?

Suggestions to combat possible slow growth.

 

[RedKite]

Your book is 1-3 million? Kind of a large gap there. Your starting in your 2nd year? Meaning your doing 1-3 million a year?

You must think about your business as a business. If you want it to grow, think about how to make it grow. Set weekly goals and work hard to hit them. If you aren't hitting your goals then add to your prospecting efforts. Do the free stuff first. You're going to have turnover in your business so make sure you aren't forgetting about your clients. Cross sell them, its also an opportunity to build value.

Most veterans trail off in the P&C business. They hire a couple staff while maintaining a 80K salary and then go fishing all day, they are ok with that. So, dont compare yourself to others. Get what you want out of your business.

 

[Scottyj]

No my book is no where near 1 to 3 million. I am still around the 200k mark by myself. I'm the only agent out here from my agency. The book size of many of the local vets here are 1 to 4 million, so you are saying a lot of these guys start just being lazy ?

That makes sense I guess... So I'll just keep at it then, I was worried these guys have been going at it 15 to 40 years of selling and only 4 million tops to show for it ...

 

[Sales71]

No my book is no where near 1 to 3 million. I am still around the 200k mark by myself. I'm the only agent out here from my agency. The book size of many of the local vets here are 1 to 4 million, so you are saying a lot of these guys start just being lazy ?

That makes sense I guess... So I'll just keep at it then, I was worried these guys have been going at it 15 to 40 years of selling and only 4 million tops to show for it ...

ScottyJ I am thinking the CA book is Mostly Commercial insurance since you can build a commercial book fast. My buddy built a commercial book in 3 years of 2+ millions. But a lot of big cases as workers comp and GL policies.

I am having hard time in your brother in CA at 15 Mil with only two staff to service that type of premium.

I sold my BOB in CA last year. Built an agency from scratch had it almost 15 years. Was around 3 mil the time of sale.

 

[isgutah]

Hi Scott,

I know that there are a ton of agencies, if not most independent P&C agencies in Utah that are well over the numbers you are talking about. So don't lose hope.

That being said, I also think that time in business does not automatically equal large book size. If small agencies do not actively try to grow, they reach a critical mass that makes it very tough to grow. I have learned that if you try to do it all yourself you will hit a wall in terms of growth. This happened to me for a little while, I was too busy servicing clients and putting out fires to focus on growth. My business suffered, I suffered. I focused on growth first, service second. Soon I was able to afford a csr, my customers experience improved, and I sold more.

 

[nyc2phi]

This is a good thread. I've heard plenty of times that IA's run into a wall once they reach a 1MM book.

Does anyone have reason why this is common? Is it because of the terratory they are in or the lack of help they have at the office? Those that have run into this, how were you able to grow past this?

 

[VolAgent]

This is a good thread. I've heard plenty of times that IA's run into a wall once they reach a 1MM book.

Does anyone have reason why this is common? Is it because of the terratory they are in or the lack of help they have at the office? Those that have run into this, how were you able to grow past this?

I had a long talk with DJS about that once.

Basically he told me at that point the service work becomes so much that you can basically only sell enough to keep your book at its current level. He said it typically happens in year 3 or so as I recall. At that point, you have to bite the bullet and hire a CSR or accept this is as big as you will get and that you'll have to do it all yourself.

 

[Scottyj]

ScottyJ I am thinking the CA book is Mostly Commercial insurance since you can build a commercial book fast. My buddy built a commercial book in 3 years of 2+ millions. But a lot of big cases as workers comp and GL policies.

I am having hard time in your brother in CA at 15 Mil with only two staff to service that type of premium.

I sold my BOB in CA last year. Built an agency from scratch had it almost 15 years. Was around 3 mil the time of sale.

He cali book It is all commercial... Medium to middle market construction, wine presses, vineyards, and a lot of independently owned hotels. The 15 million is between two 20 year vets and past producers who have left the business First option to buy in our contract.

Isgutah thanks for the info. I have been asking a lot of agency owners and hearing all under 3 million, after 15 to 30 years... This scared me. So you all have a good point... What I am hearing is the concept of carrying capacity... Resources vs needs. I have a girl in my California office who is dedicated to certificates only but she cannot process endorsements or put out fires. I find my time during the day can get eaten up by this as well.

I have started to work on apps in the evening to free up sales time and that has helped a bit. At what size book did you all find it was essential to bring on in house staff ? As I said my growth at just shy of 2 years is at about 200k still pretty small and from what I hear slower than most.

 

[isgutah]

I got a part time csr, who worked from home at around $450,000.
She worked as needed, not ideal but better than nothing. Guard your time. My goal is to bring in some new commercial revenue every day. Selling fixes everything! Focus on selling and bringing on solid accounts, keeping your pipeline full, and try to avoid having mornings like I am having right now. (watching the news and reading insurance forums.)

 

[Sales71]

I got a part time csr, who worked from home at around $450,000.
She worked as needed, not ideal but better than nothing. Guard your time. My goal is to bring in some new commercial revenue every day. Selling fixes everything! Focus on selling and bringing on solid accounts, keeping your pipeline full, and try to avoid having mornings like I am having right now. (watching the news and reading insurance forums.)

Wow that sound expensive $450,000 staff. Wonder if she make more than you!