Getting Started...And Yes, I've Read the Threads

[Infuego]

I have read the majority of the threads from most of you and I’ve pulled a lot out of it, so thank you. That being said getting started in P&C seems more than a bit confusing…That SIAA thread made seeing things for what they are pretty tough. So if you don’t mind I would like to pose similar but simple questions about my situation and what I would like to accomplish.

Currently I’m an independent LH agent and I’ve done well with that in establishing a client base for roughly three years. I have had a number of clients, friends and family ask me about homeowners and car insurance. I’ve pre-qualified 5-10 p&c clients for when I get licensed, which I expect to be in less than 30 days.

Obviously getting started is the problem, and not getting started properly appears to be a disaster down the road. I have read about SIAA, I have a few relationships with independent brokers now- one has offered me deal/ split, and the other one I’m sure would, and then there is clusters/ MGA. So knowing that I want to be independent going down the road and be fully able to write business at a high contract level and enjoy independence…What should I do? And where should I start?

Thank you for taking the time to read this.

 

[robtmccarthy]

I have read the majority of the threads from most of you and I’ve pulled a lot out of it, so thank you. That being said getting started in P&C seems more than a bit confusing…That SIAA thread made seeing things for what they are pretty tough. So if you don’t mind I would like to pose similar but simple questions about my situation and what I would like to accomplish.

Currently I’m an independent LH agent and I’ve done well with that in establishing a client base for roughly three years. I have had a number of clients, friends and family ask me about homeowners and car insurance. I’ve pre-qualified 5-10 p&c clients for when I get licensed, which I expect to be in less than 30 days.

Obviously getting started is the problem, and not getting started properly appears to be a disaster down the road. I have read about SIAA, I have a few relationships with independent brokers now- one has offered me deal/ split, and the other one I’m sure would, and then there is clusters/ MGA. So knowing that I want to be independent going down the road and be fully able to write business at a high contract level and enjoy independence…What should I do? And where should I start?

Thank you for taking the time to read this.

Even clusters require some type of commitment, you're best and quickest bet would probably be to partner with a local agent / broker. You need binding a mga / wholesaler is to slow for personal lines.

What state are you in?

 

[djs]

If you are looking at 5-10 (or even 50) clients to start with, I would consider keeping it simple with something like Superior Access or Insurance Noodle. Since they are wholesalers, they are a bit finicky to work with (spelled slower to do things then you would like), but with a small client base, it will work out okay.

Besides, they include raters, pretty broad markets, and pretty much anything you need to start.

Now, if you want to dive in head first and really focus on P&C, this isn't the way to go, but if you are just dabbling to get a feel for it, you'll learn some of what you need to know pretty quickly.

Then, as you grow, get direct appointments and move the business to your direct code (Superior Access is better in this regard).

Now, start adding up the expenses of doing P&C prior to worrying about a handful of clients. Your E&O is going to be through the roof compared to what you are used to. Support on the policies is much more than you are used to. You'll have to gain access to raters, management systems, etc, etc.

I'm just trying to hint that dabbling in P&C is tough because of the overhead. It is reasonable to work a deal with an existing agent, its not bad advice, if they will provide you with the tools you need to be successful and you can have an exit strategy.

Dan

 

[Infuego]

Even clusters require some type of commitment, you're best and quickest bet would probably be to partner with a local agent / broker. You need binding a mga / wholesaler is to slow for personal lines.

What state are you in?

I'm in Massachusetts. The local agent route is the way that I'm leaning right now. I originally thought that the commissions should have been bigger when I spoke with the broker, but after looking at the other options I can see I made the wrong assumption. Plus having a local place to work out of is worth a lot.

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If you are looking at 5-10 (or even 50) clients to start with, I would consider keeping it simple with something like Superior Access or Insurance Noodle. Since they are wholesalers, they are a bit finicky to work with (spelled slower to do things then you would like), but with a small client base, it will work out okay.

Besides, they include raters, pretty broad markets, and pretty much anything you need to start.

Now, if you want to dive in head first and really focus on P&C, this isn't the way to go, but if you are just dabbling to get a feel for it, you'll learn some of what you need to know pretty quickly.

Then, as you grow, get direct appointments and move the business to your direct code (Superior Access is better in this regard).

Now, start adding up the expenses of doing P&C prior to worrying about a handful of clients. Your E&O is going to be through the roof compared to what you are used to. Support on the policies is much more than you are used to. You'll have to gain access to raters, management systems, etc, etc.

I'm just trying to hint that dabbling in P&C is tough because of the overhead. It is reasonable to work a deal with an existing agent, its not bad advice, if they will provide you with the tools you need to be successful and you can have an exit strategy.

Dan

I can see that just doing deals here and there isn't a good path to follow. I knew about the overhead costs, and thought I could work from home for a 12-15 months- if I set that expectation with my clients. Thanks for your input, it's going to help me in making sure I don't hurt myself down the line.

 

[djs]

Work from home - sortof.....

It solves a bit of the monthly expenses of a P&C agent, but keep in mind (in very general terms):
E&O: $300 a month ($3600 a year) might do better
Rater: $75-$400 a month, depending what you need
Management system: You can start with Excel, but, figure $200 a month
Advertising
Marketing
Staff (you can start with just you, but quickly you'll need help)
etc


I've seen a lot of life and health agents try to enter into P&C and not realize the expense of doing it. Non-agents tend to do more research. Its not a bad move, just make sure you realize the costs, which are frequently upfront. Yes, you can skip management systems, raters, etc for a short while. You won't get far though.

Work from home: The other side of this is it becomes much tougher to get direct appointments with carriers without an office. If you were established, it probably wouldn't be as big a deal, but carriers have gotten very tough lately on appointments and they are looking for a serious commitment.

Dan

 

[Infuego]

The more I look at this, it does make the most sense to work with the local broker. The overhead alone makes it worth it. That E&O charge is ridiculously high.
I think what I'll do is sit down with him and map out a plan that we can both embrace.

 

[robtmccarthy]

Agreed, if you can work out something fair with the local agent thats probably the most efficient way to get you up and running.

 

[Infuego]

Agreed, if you can work out something fair with the local agent thats probably the most efficient way to get you up and running.

Did that yesterday got a 50/50 split year one with 25/75 renewals. 50/50 and 50/50 year two. I feel like this was fair and it's something we can both embrace. That seem good to you?

 

[robtmccarthy]

Did that yesterday got a 50/50 split year one with 25/75 renewals. 50/50 and 50/50 year two. I feel like this was fair and it's something we can both embrace. That seem good to you?

Who is servicing the book?

If the agency is servicing your renewals this is a fair split. however if you're expected to service the renewals you should ask for a higher percent.

 

[Infuego]

Who is servicing the book?

If the agency is servicing your renewals this is a fair split. however if you're expected to service the renewals you should ask for a higher percent.

The agreement is that he will do all the servicing. However he knows that the majority, if not all, of my new p&c clients will be current LH clients, friends or family. And I'm sure they would just call me, they're the ones that asked me to do their p&c policies for them in the first place.

Sorry so long on the response.