Help a Seasoned Life Agent Get a Running Start with P&C!

[sgriswold]

I've been an independent life/health agent for nearly 8 years now. I took over the family agency which has been built on life/health/disability, and expanded our offerings to include P&C based on client demand.

Now, I have tons of work, but am finding that this side of the insurance biz has very little in common with what I'm used to, and I'd like to get a better idea of the way the industry works before I piss off the wholesalers I'm working with.

Here's my questions. Would greatly appreciate if anyone could help answer them. If you help enough, maybe I'll send you a fruit basket.*

1) As an independent agent, is my best bet going with one mega-GA or smaller, specialized ones? I'm currently quoting through 3 different GA's: one for WC only, one for regular commercial/liability, and one for E&O. After reading a bunch of posts from this board, it looks like I might be better served putting most of my risks through Insurance Noodle, etc.

1a) Would like suggestions on which huge wholesalers to go through, especially in CA.

1b) What's the advantages of direct appointment vs. going through a wholesaler? I still am fuzzy on this one, because in L&H with GA's you get extra support for free, more or less.


2) How does commission work when using a GA? It looks like they take a broker fee out of payable commission? I'm used to GA's having their own override from the carrier.

3) Is there anyone who's done the L&H -> P&C crossover that can tell me any other idiosyncrasies that may be "counter-intuitive?"

Thanks in advance for any help!




*we are out of fruit baskets, but I have plenty of thank-you cards.

 

[Gulliver]

Good Morning:

I am going to sidestep some of your questions and discuss some things that I have seen as issues when doing what you are doing.

First of all you will develop a much higher service load when working with P/C business. Your customers need to interact with you more often. For example. They need ID cards for their car. They need certs for their busienss to show proof that they are insured. Same goes for the auto needing certs faxed to the bank every time the bank loses something. It is a constant service load.

Secondly, I would work with several GA's; if they have something to offer that another cannot provide go there and utilize their services. When you do utilize their services make sure you understand the payouts they offer and whether or not they have premium requirement. Also check to see if you can take over the business if you are fortunate enough to get a direct contract.

The key here is that all agencies use GA's for some of their business and over time obtain direct contracts with those that they find a greater need for. If you can feed the direct contract effectively try to get direct conctracts with all that you can satisfy. Otherwise you will be doing the GA thing.

On another note why not consider some type of a back and forth agreement between a local P/C agent and refer each other business. Sometimes that can work but it has its own challenges.

The last thing would be to consider multi-state/internet based Life/Health sales. You could potentially develop a large remote market with what sounds like an already large local book of business.

I hope these are good points for you to think about.

Gulliver

 

[sgriswold]

Gulliver, thanks so much for your comments. I've responded to them in kind. Trust me, I've thought long and hard about the alternatives to taking on this task.

First of all you will develop a much higher service load when working with P/C business.

I realize this, which is why I'm also considering hiring a full time P&C agent. I have a friend with several years of experience who's getting tired of her corporate gig.

Also, I do an IMMENSE amount of policy service with our current client base. We have over 800 clients, and ALL of them get policy updates once a year, and most get a call or visit from me.

Also check to see if you can take over the business if you are fortunate enough to get a direct contract.

Could you explain the benefits of a direct contract? Coming from the life/health side, it's almost always better to be using a GA because of commission overrides, additional support, and not having to deal with morons at call centers.

On another note why not consider some type of a back and forth agreement between a local P/C agent and refer each other business. Sometimes that can work but it has its own challenges.

Been there, tried that. Has the following problems:
1) There is a suprising dearth of independent P&C agents in the area. Most are Farmers et al.
2) Have done trial referral swaps with 3 agents I've met. All of them are flaky and never followed up with client properly, or never called at all.

3) Philosophical differences -- Since our agency has been in business 61 years, with several of our clients being with us most of that time and good friends with my late father, they expect a certain level of service. I have yet to meet ANY agent that is as devoted to service. Most are sales-focused. Yes, I understand that it is how you make money, but it appalls me how many agents just don't care about making their clients happy.

The last thing would be to consider multi-state/internet based Life/Health sales.

We already have clients literally all over the world. Between me and another agent in the office we're licensed in ~20 states. And my wife (marketing guru) is setting us up with a larger internet presence for this purpose, and she'll be handling sales on that end.

So as you can see, the only logical thing for us to do is to expand our offerings. Thankfully, this will require almost zero marketing at first because I have a client base ready to switch their P&C coverage to me at a moment's notice.

 

[Norwayguy]

Good Morning:
First of all you will develop a much higher service load when working with P/C business. Your customers need to interact with you more often. For example. They need ID cards for their car. They need certs for their busienss to show proof that they are insured. Same goes for the auto needing certs faxed to the bank every time the bank loses something. It is a constant service load.

Gulliver

Gulliver,

I can not let that pass...I have interviewed with P&C agents to do their financial sales a couple times and they alway say there is a higher service level in P&C and I do not buy it...I sell securities products as well and not only are we doing annual policy reviews, reallocations of the investment, beneficiary changes, changing the program as they change employers (very often), changing the contribution amounts etc...I for the first time a year 2 years ago need to place a claim on my home owners policy called my agent and was given an 800#....okay so I called the number they said the adjuster would contact me within 48 hours..so she does, she is out of Mass I am in Maine her first question was do I have a digital camera...Ie to document everything and send it to her....Talk about service from a P& C agent....

Now you mention sending out proof of insurance..at least on cars the annual renewal comes via mail from the company, I am sure you are mst often speaking about people purchasing a new car and changing the coverage, I ouldn't consider it service work because in most cases because of the higher replacement value the premium will be going up...No in relations to business needing copies of certs that can be true...I just wanted to say as a P&C agent you don't necessarily have the market cornered on service work.

 

[Gulliver]

Thanks Peter,

Good points, however, P/C is more demanding on the service side than Life. Just ask those like myself that have done both. This really isn't something that we should get into a back and forth on. The facts speak for themselves. Lets just help the original poster with advice on his situation. He is obviously a great insurance business person based on his comments and he is looking for great ideas.

Gulliver
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Peter,

One more thing

Securities is a whole different ball of wax. You are going to be more service oriented. We were talking basic life/health

Gulliver
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Sgriswold,

Sorry about the debate on service levels.

To answer your questions about direct contracts the biggest advantages with P and C are as follows.

1. Higher commissions, GA's usually take about 25-35% of the commissions for their services. Not always though.

2. Guaranteed Ownership of business

3. Contingencies


There are many others but these alone are important. The biggest drawback would be premium committments and difficulty in maintaining them from year to year.

Hopefully some others will chime in with ideas on this. I'm out.

Gulliver

 

[moeasadi]

P & C definitely requires more service than Life.However it's more stable in residuals, so that hopefully pays off.
I spent a lot of time on getting my securities licenses and finally decided just doing P&C alone .
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1a) Would like suggestions on which huge wholesalers to go through, especially in CA.

I would recommend to find an independent agency in your area that agives you access to their markets for a fee.
call or email I give you some names.

 

[sgriswold]

I signed up with Superior Access yesterday based on the amount of markets alone, and it may have already paid for itself by helping me bag a good-sized WC case.

Now I have a client looking for HO that let his policy lapse for 2 months. Why do I get all the "interesting" risks?

 

[djs]

The big benefit to being direct is frequently binding authority for a risk class. Most GA's do not provide this, though frequently do offer some sort of quick bind solution.

Now I have a client looking for HO that let his policy lapse for 2 months. Why do I get all the "interesting" risks?

Why is this a challenge? I do it all the time. The only issue here is if they do it once, they will do it again, though frequently, they realize it isn't a great idea when they get the bill from the bank for the forced place coverage....

Dan

 

[Soaringagent]

Yep, they are probably contacting you because they got a huge bill from their mortgage with forced place insurance.

 

[Jerbond]

The best reason to get direct appointments is the same day binding authority along with higher commision (No need to pay the GA a monthly fee or comission split) I am going through NIA- they seem to have all the good carriers until I can get direct appointments.