General Question for an Independent Agency

[dylanrowan]

Hello Everyone,

I've done some searching and I can't really find a good answer for my question. I currently work for an agency doing Health and Life mainly focused on the Health portion. The agency has been around since the 80's so it is well established with a good sized client base. I was recently talking to my boss about possibly expanding into the P&C business as well because we have a lot of clients that ask if we can handle all their insurance needs. Based on everyone's experience would it be a good idea to expand into the P&C business? I know it's a general question but I can't seem to find any good examples on here of people starting with L&H and expanding into P&C. All answers are appreciated.

P.S. My boss would still want to keep it independent which I'm sure is probably the best choice.

 

[myfakename]

Too much competition out there. Us P&C agents dont need anyone else to fight with.

 

[shawnmwalker]

It is possible. But hard to do. You have to silo out the two units or it does not work.

OI have met large orgs that try but fail at making it work. Can it- Yes. Will it- UHHHH

 

[Rick Deckard]

McDonald's, Burger King, and Wendy's decided at different points to expand their menus from just a burger, fries and cokes/shakes to chicken sand, salads and fruit/yogurt.

I don't actually eat much of this type of food but millions of Americans do. You can opt to specialize in things or you can be a one stop for all. I don't see how it could hurt but thn again I think most of you have lost money by the truckloads not having a Series 6 Lic to encourage folks to invest more so they are self insured later in life. You know what a little override, like a 1/4 of 1% is on say $25 MM under management? That's $60k a year in overrides just opening Roth IRAs for these families getting started as homeowners.

It's something I don't see discussed much here at all. That is the real cross selling if you ask me.

 

[VolAgent]

McDonald's, Burger King, and Wendy's decided at different points to expand their menus from just a burger, fries and cokes/shakes to chicken sand, salads and fruit/yogurt.

I don't actually eat much of this type of food but millions of Americans do. You can opt to specialize in things or you can be a one stop for all. I don't see how it could hurt but thn again I think most of you have lost money by the truckloads not having a Series 6 Lic to encourage folks to invest more so they are self insured later in life. You know what a little override, like a 1/4 of 1% is on say $25 MM under management? That's $60k a year in overrides just opening Roth IRAs for these families getting started as homeowners.

It's something I don't see discussed much here at all. That is the real cross selling if you ask me.

And did selling chicken sandwiches, salads, etc. help or hurt? Was it a proactive move or a reactive move to a reduction in sales? And no this is not a rhetorical question. Yes, some chains have lost their way. Others found a new path. I pick Hardees as an example. They were quickly turning into fried chicken and breakfast until bought by Carl's Jr. Now they are known for burgers again. Hate them, like them, whatever, now they have direction.

Also, do you realize how little money there is in a $50/mo IRA and how much it costs to do it? Now if it helps retention of more profitable business, that is great. But as a profit generator, it is a real loser unless you can automate it and do it in volume. When I gave up my Series 6, I was spending thousands a year in E&O, branch fees, etc. That is a lot of IRAs to get over that hurdle. Plus you now allow FINRA and your B/D into your business. And FINRA doesn't just stop at investment files. They will turn your entire office upside down if they feel like it.

 

[djs]

What Shawn said is dead on. To do it basically means you have 2 companies inside the agency. You can do the same basic thing with a lot less headaches by setting up a referral system with a good P&C agent.

Unfortunately, a lot of P&C agents have someone in their agency that sells life and health. It is usually a separate person though because it is a different type of sale and both require a bit of specialized knowledge.

Many agents have tried to add P&C, including mortgage brokers, realtors, and many others. P&C is a volume business and requires full time attention to it. Having a handful of clients will end up costing you more in time and money then you'll ever make from it. Also, the carriers don't usually like to appoint agents without a full time focus to writing business.

Rick is correct in that adding investments is probably closer to the L&H side (especially life), but its not something that is for everyone to sell. A lot of the agents on the forum at one time had their license to sell investments (6 or 7) but have surrendered them with a smile on their face as it significantly complicates business.

Dan

 

[insurance1822]

I've seen plenty of mortgage & real estate offices try and fail. I think it's reasonable to expect an existing client base can convert. But ultimately that's just not enough ... in fact not even close.

It would be like me expecting that because I have a large yard, I can farm on it and make money. Fundamentally, that makes sense right? But clearly you need so, so much more.

With the right direction, planning & follow through ... of course it can be successful (like anything.) Having the current agency & set up would certainly be a plus, but certainly not a golden ticket.