Am I In Over My Head?

Nov 26, 2015

  1. VirginAgent
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    VirginAgent New Member

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    Hi Everyone,

    Just wanted to start off by saying Happy Thanksgiving!

    I recently met a State Farm recruiter at a friend's BBQ a few weeks ago. To keep it short, he was telling me about an agent that is about to retire in a few months and he can GIVE me his books of business. The retiring agent has about $4 Million, but he said he's only allowed to give me around $1.2-$1.3. I have no experience or knowledge of insurance sales. I currently own a small business selling satellite tv. He told me it was similar when you break the business down to its common denominator, basically, market/advertise and find/retain customer, same concept. I make around $120k/annually. Basically what I'm trying to ask is, what kind of challenge lies ahead of me? Is it feasible to make more than I currently make in the near future? And lastly, is there anything that I should know in advance before taking on this challenge?

    Any feedback will be helpful.
    Thanks in advance!
     
  2. TampaHound
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    TampaHound Guru

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    You would need to be licensed of course. I don't do Property and Causality which I think is the majority of State Farm's business so take my advice with a grain of salt.

    One) Sales is Sales that much is true, but P and C anymore seems to be price driven and that means a lot of hand holding with your clients. So there is a lot of customer service. Two) Why would he give that much business to someone brand new to the industry? I would definitely look hard at that book of business.

    I actually enjoy Insurance, it's a cliche but we really do affect people's lives (hopefully for the better) and because of that it's a good business to get into. This is also a great place to look for advice and info.

    Good luck no matter what you decided to do.
     
  3. Chazm
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    Chazm Guru

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    If he's a State Farm agent I'm pretty sure he doesn't own the book. My roommate is taking over an office in Jacksonville next month and he gets the guy that is leaving book. Well half and the other half goes to another office.

    Also, you can't just jump in and know what's going on and service the clients, add new clients without serious training. If he does own his own book I doubt he would just give it to you. He'd probably ask for a couple hundred K
     
    Chazm, Nov 26, 2015
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  4. xrac
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    xrac Guru

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    What happens to the other half of the book? Does it go to another agent to start a new office 1.5 miles away and maybe siphon off part of your book? Based on what I know about this opportunity you will not see that kind of money for 5-7 years if ever. Are you willing to invest $50k-$100k the first year of your money? Do your due diligence and proceed with eyes wide open.
     
    xrac, Nov 26, 2015
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  5. indienoise
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    indienoise Guru

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    If you're looking to make MORE than you currently do, I'm not sure this would be the opportunity for you. I'm not saying you couldn't, but as of right now SF's compensation can be as low as 8%, or do I've heard. One thing that's nice about an outfit like state farm is they pick up a lot of the cost of mailers, billboards, etc, but let's say you inherit a $1MM book and within 3 years grow it to $2MM. That could mean as little as 160k, minus your loan payments, lease, employee wages, and other expenses. Even if you get 10% from them, that's a lot of work and uncertainty to MAYBE make as much as you currently do.
    I don't know how your current business is structured, but with SF when you retire it's not yours to sell it, pass on to your kids, or otherwise do as you see fit. Like what's happening with the guy they want you to replace.
     
  6. agentinsouth
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    agentinsouth Guru

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    SF is now at 8%.... Wow- 8% (I am a P&C personal lines guy) would not get me out of bed!
     
  7. indienoise
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    indienoise Guru

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    Yep.

    I don't think it's across the board - only if the agent doesn't make enough life/financial sales.

    Still, 8% was the last straw that made me leave the agency I was with and go indy.

    I was 1099 for a NW agent, working as a satellite office in my own location, providing my own leads. Circumstances out of my control led to a loss of extended commissions which bumped me down to 8% on new business after my split, so I figured paying my own e&o and software was a small price to nearly double my commission. Not to mention get access to the carriers i wanted/needed to boot.
     
    Last edited: Nov 26, 2015
  8. thomasm
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    I don't know much about P&C but I know how to run door to door sales crews, which is how satellite tv is sold. Out of all the insurance lines P&C makes the most sense to generate a high volume of leads going D2D.

    I'm pretty confident you could generate 10-15 leads per canvasser working the prime time hours (3pm-8pm)

    You'd probably be better off starting a lead company on the side before you drop the other business that's working.
     
    Last edited: Nov 26, 2015
    thomasm, Nov 26, 2015
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  9. Chazm
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    If you run a State Farm and average 8% you won't make it. You should be doing a lot of life, mutual a etc.
    On a 2m book of biz you'll be more around $400k minus expenses.

    We should note here too, firstly, if this guy runs a State Farm office he can't just give half of it away. Secondly, if the original poster were to somehow get the business and its State Farm business he can't just take it. You have to be selected from SF. You have to complete their training to have your own office and it takes a while to get one.

    So this whole convo is moot
     
    Chazm, Nov 26, 2015
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  10. LGilmore
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    Well not a P&C guy but after reading the original post, OP here is what you are .. a piece of poo they are going to toss up on the wall and they will see if you stick.

    Honestly when you read your post think a bit. You have no license, no experience in Insurance sales (and yes, it is very much different than other sales) Yet you're being offered a practice? Would you do that in your business to someone who has no experience? Just give them the keys?

    A recruiter doesn't look for quality and I am not saying you aren't, but a recruiter looks for numbers and hopes somebody sticks.

    I mean anything is possible, but know when you're being blown smoke too.
     
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