A Small Agency ?

[isgutah]

The girl I hired was part time, but getting help in the agency has been one of the best things I have done. If you don't get help chances are you will stay small and always struggle.
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I should clarify, $450,000 was my written premium at the time.

 

[rudy323]

Don't think of staff wages as "coming out of your pocket"

It's a cost for growth

 

[greatfish]

Scotty

Assuming you are doing all commercial, like your CA office:

Your question should be based on revenue rather then premium. At $200,000 of premium, guessing that is generating $24k or so of revenue. Not enough to hire someone or even open a satellite office. I think that the CA account manager should be doing both your certs and policy adjustments while you should be doing apps and new business.

I like the satellite office to be able to generate 15% profit. Depending on your commission split (assuming it is in the normal range) and expenses guessing it will take $300-350K of revenue to make a satellite office with an account manager profitable.

Also don't forget that it is difficult to compare premium figures from state to state as some states have lower rates and some states are higher.

 

[CaptiveGuy]

I agree that many agencies hit a plateau once the owner is at a comfortable income. There really is no incentive to keep selling hard if they are making enough money and have staff in place. Of course, most times the staff the owner hires also is less driven than the business owner as well.

I'm at $1.3M after 26 months and the first year with no service work I was selling a lot more but when service work, cancellations, etc. caught up I was selling about $20k less per month. I still have solid growth each month but hiring a CSR was key. I would hire as soon as you could afford it or you were missing out on sales opportunities because of service work.

 

[WCMason]

I have a semi-related question. Agency size is usually described based on annual premium. Given that comp varies so widely on type (life can be 100% or more, med supps around 20%, and individual health half that), I've never tracked premium as a meaningful number to me. That's the carrier's revenue. I track my revenue and make decisions on staffing based on that alone. The only time I focus on premium is when I'm trying to qualify for a carrier convention or contest based on it (only 4 weeks till Budapest!). Is there a value I'm missing?

Sent from my iPad using InsForums

 

[EugeneM]

How are you driving business? Are you actively soliciting for accounts and pumping out bids? I am a firm believer that you get back what you put in.

 

[Sales71]

I agree that many agencies hit a plateau once the owner is at a comfortable income. There really is no incentive to keep selling hard if they are making enough money and have staff in place. Of course, most times the staff the owner hires also is less driven than the business owner as well.

I'm at $1.3M after 26 months and the first year with no service work I was selling a lot more but when service work, cancellations, etc. caught up I was selling about $20k less per month. I still have solid growth each month but hiring a CSR was key. I would hire as soon as you could afford it or you were missing out on sales opportunities because of service work.

Captive guy great work at growing your agency. Are you still captive or this is your IA agency. Its hard to do 50K a month as a captive agent.

 

[CaptiveGuy]

Captive guy great work at growing your agency. Are you still captive or this is your IA agency. Its hard to do 50K a month as a captive agent.

Thanks, I am IA now was only selling about $25k a month when I was captive.

 

[Scottyj]

I am cold calling like a mad man, in UT, NV , and California. It's just me out here, growth is slow lately but consistent. I'm a pretty docile sales guy so I'd imagine If I get more aggressive in my local market I'd see a bit more growth, which is what I am attempting currently. The CA market Vs UT market are polar opposite in respects to consumer behavior but now that I feel comfortable between the two things are picking up prospect wise.

 

[todd02]

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.

I'm a captured agent with Farmers, 99% personal lines, 3 1/2 years and 3.5 million book. Like the others have said its up to you to grow. Your insurance company has a preferred segment of clients you just have to find out how to effectively market it and then pound the hell out of it. Set goals, if you fail, write out why you failed. Be realistic and it will pass 3mill in no time.