Advice on starting an agency

[Lauralynn]

I have an opportunity to start up my own agency. It has been a dream of mine since i graduated college in 2013. I have been working for other agents since 2016 and I am on maternity leave currently with the agency that I am working for now. Life has changed and when i go back i will be working for only commissions where as before i was working on salary and commissions. The way i have thought about it if I am going to work for commissions why not work for myself.

I am young I am 33 years old. I know and understand insurance and I love it. I even have had clients currently tell me i should open up on my own agency. They would rather deal with me. (no I don't have non compete clause with the agency i work for now). I don't know nothing about running an agency but I am willing to learn.

I am looking at two companies Farmers and American National Insurance. Neither are in the area I am in. It might be something different. This are is very saturated with Farm Bureau and State Farm and independent agents.

I'm not gonna lie I am nervous and scared. I don't want to fail.

For those that started their own agency what made you decided to do it? Was it a rough start? Any and all advice on doing this.

 

[DHK]

Let me start with asking you a quick question:

What kinds of agencies have you been with thus far? Are you with independent agencies or with a big name brand agency?

Both have their place, but the ability to sell a name-brand policy is different than for an independent agency.

Now, while I do not have P&C sales experience, I know enough to be dangerous. Selling policies for big name-brand companies... is more about the buyer than it is about the company.

A great qualifying question to ask would be: "Are you the type of insurance buyer that is always looking for the absolute cheapest policy every year? Or are you the type of insurance buyer that stays with a company knowing that you'll get great service and prompt claim payment, even if the policy isn't the cheapest each year. Which would you say you are?"

If you're independent, you can certainly service both.
If you're with a big name-brand company, you'll want the 2nd kind of buyer and you might sell the 1st kind of buyer a policy from another company.

 

[Lauralynn]

I have worked both the captive and independent agencies. I currently work for an independent agency. The companies that are reaching out to me are captive companies.

 

[fed up]

If you go independent, many of those same carriers will still contact you to take on their lines.

 

[Matthew Labb]

I spend most of my time talking with agency owners educating them on our P&C network. I would say about half of the people I speak with are currently captive looking to switch over to indie. The other half, indie looking for more carriers.

I'm not saying captive is dead, but there's a reason so many people are jumping ship.

Ask yourself, do I want to sell products for one company, or have access to many different companies? If you want to have many products across many different companies, captive is not for you.

Do I want freedom to market as I see fit? If yes, captive is not for you.

As someone else pointed out, even if you do go independent.. you'll still have access to some of the captive products. Ask yourself, why are captive carriers feeling it necessary to have indie agencies push their product?

It isn't all sun shine and rainbows on the independent side either. There's challenges, many of them. Learning the products across different carriers for instance. Putting together a marketing plan that differentiates you from other agents.

Marketing yourself without the trusty State Farm or All State name behind you. People sometimes don't realize how much that name brand recognition means. But that's only one component to the business.

Ultimately, if it were me...I would look at both captive and indie options and evaluate which better suits my personality and view of the industry in the future.