Easy P&C Appointments in CA?

[Bertolinoins]

How exactly is the carrier going to know that you are always giving them the first right of refusal? How can they monitor with who and what you are writing?

They don't... but if they don't see much volume from you then you are done. Also... starting out lying to your one direct appointment is not a recipe for success in this business. There is no quick and painless way to start up an agency... you either need to deal with the various MGA's, a broker that will let you build your book and buy it out or pick a good carrier and go to battle with just them until you have some volume on the books and a track record of success. There is no free ride. Starting out... you need to protect your reputation as it is your key to success with carriers. If you screw over one carrier... chances are you will see that same sales rep at 2/3 different local companies in the next 15 years so you have shot yourself in the foot. If word gets out among the company reps that you are not a strait shooter... life will be difficult for you. If word gets out that you are honest, hard working and aggressive... appointments become easier to come by.
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How long do they retain the right of first refusal? After a few years, do you gain the ability to shop the coverage without seeing if that first carrier will take it first?

I think the contracts last a few years... I looked at it with Allied and CIG but opted to join a clu$ter instead. Much more expensive upfront but it was a better mesh with my business plan. You can shop the business and write with an MGA but why would you if the direct carrier was competitive in your area and they were paying a full 15-17% + you could qualify for contingency while the MGA is paying 10%?

 

[VolAgent]

I think the contracts last a few years... I looked at it with Allied and CIG but opted to join a clu instead. Much more expensive upfront but it was a better mesh with my business plan. You can shop the business and write with an MGA but why would you if the direct carrier was competitive in your area and they were paying a full 15-17% + you could qualify for contingency while the MGA is paying 10%?

Well, I was thinking in a few years you'd be in position to pick up another direct carrier. Or is that unrealistic?

 

[Bertolinoins]

Well, I was thinking in a few years you'd be in position to pick up another direct carrier. Or is that unrealistic?

That isn't unrealistic. After you have survived 18-24 months and have show the ability to write $150-250K in quality business with one carrier... the rest of the carriers will jump on board with you. One marketing rep told me that aside from diluting their brand by giving access to anybody with a license... it cost their company $2200 to create a producer code. They want to know you are going to succeed before jumping into bed with you.

I do know some scratch producers that got several direct appointments right off the bat but they were former mortgage guys that had substantial funding to start and a very strong business and marketing plan. The carriers were confident they could make it through the first few years.

 

[VolAgent]

That isn't unrealistic. After you have survived 18-24 months and have show the ability to write $150-250K in quality business with one carrier... the rest of the carriers will jump on board with you. One marketing rep told me that aside from diluting their brand by giving access to anybody with a license... it cost their company $2200 to create a producer code. They want to know you are going to succeed before jumping into bed with you.

What brand??? Maybe it is different in commercials lines with business owners, but I haven't heard of the vast majority of the personal lines carriers. Safeco and Progressive are it, and I don't really think much of them anyway.

I can understand the cost aspect, $2200 and marketing rep time can add up if you are not careful.

 

[oicu812nbama]

I am as honest as anyone can be. someone tried to tell him that signing a first right of refusal is like being captive. i was making the point that it's not true. writing a bunch with a good carrier is only going to benefit you in the long run by getting higher pay outs and profit sharing. i have the undaunting task of figuring out what companies to use in my states so I wont be wasting time quoting stuff that i'll never write. i have marketing money and a plan. (not advertising). the rest will be downhill after i figure out who is competitive in my area. thanks for all the posts bert.

 

[JCK818]

This is what I don't get either. Whats keeping me from promising first right of refusal to 3 different carriers?

 

[Bertolinoins]

This is what I don't get either. Whats keeping me from promising first right of refusal to 3 different carriers?

It isn't a pinkie swear... It is an enforceable contract with a company rep visiting monthly to review production reports.

 

[VolAgent]

It isn't a pinkie swear... It is an enforceable contract with a company rep visiting monthly to review production reports.

So much for being independent, eh?

 

[Bertolinoins]

So much for being independent, eh?

You asked how to get direct appointments without any volume through a MGA or cluster... This is one option that has been used successfully.

 

[VolAgent]

You asked how to get direct appointments without any volume through a MGA or cluster... This is one option that has been used successfully.

Actually, someone else asked. I was just curious what the answer would be.