Independent Needs Your Help.

[brwirt]

I am strongly considering the opportunity of being an Independent selling COMMERCIAL insurance.

The only way I can get appointed with carriers are either get appointed directly, work with a broker on a 70/30 split on advanced commission and 30/70 on renewals or go through a wholesaler.

Due to my lack of experience and book of business size I will not qualify directly. Working with a broker is not an option because the split on the renewal is unacceptable considering I am bearing all the costs working from my home.

Thus, that leaves me with getting appointed directly through a wholesaler. My question is this, based on the experience and know how of all the great people on this forum, what would you do? Is the commercial segment worth pursuing?

 

[Bertolinoins]

Option 4: Find a broker that offers a better renewal split. If you are a true 1099 sub producer working from home and not costing him much... you should be able to get 50% on renewals.

 

[brwirt]

If the costs are the same working as a 1099 sub producers as it would be appointed through a wholesaler why would I NOT go with the wholesaler if my renewals are higher. I appreciate your response and help. Greatly appreciated.
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Sorry Bert, I neglected the mention the wholesaler is offering non-binding authority, no time frame for release, my own book of business and 70% renewals.

 

[Bertolinoins]

A few things to consider.

1. An independent agency with direct access has online rating and binding authority and the top commission levels (7-30% depending on the line of business and the carrier). Wholesalers usually take a third or more off the top (carrier pays 15%, you get 10%) and they often charge broker/policy fees which make you less competitive on smaller accounts.

2. You will not be able to close as many accounts going through a wholesaler (waiting for quotes, etc) and you are giving away 33% off the top. Basically you are getting 66% new and renewal without rating and binding authority and all of the overhead.

If you want to be a producer... I would look for a smaller agency with good market access willing to give you 55% new and renewal. If you want to be an agency owner... I would suck it up with the MGA's/Wholesalers for a few years until you have enough volume to get direct appointments. If you are well funded... you can look into some local, regional clusters that will pay 100% + contingency but they typically have a fee to join and a monthly fee to cover overhead.

 

[brwirt]

Bert, thank you so much for the invaluable incite. I do have a question. Since I do not have much funding based on my current situation what would you do? My current offer is 70% adv commish and 30% renewal.

 

[Bertolinoins]

If you have never been an independent commercial producer, I would go to work for an agency for a few years. You will learn enough from the successful producers to make it worth your while.

 

[argyle]

Wow. This is a very informative thread!

@brwirt: I am in the exact same position as you. I'm newly licensed and it's been a real struggle trying to find an agency to work with. I'm not interested in working with a wholesaler because I just don't think I'll learn the ropes the way you need to make it selling P&C. Surprisingly, I can't find any decent agencies to work for in my area (Orange County, CA). Most of those that I'm finding are 2 or 3 person agencies, usually just a family working together and seems very insulated from everything. It's very hard to find companies that focus on commercial for some reason. Is this what you are finding? How many agencies were you able to talk to?

@bertolinoins: How would you suggest finding a good company? I've searched online, yellow pages, etc. Thanks.

 

[Bertolinoins]

Wow. This is a very informative thread!

@brwirt: I am in the exact same position as you. I'm newly licensed and it's been a real struggle trying to find an agency to work with. I'm not interested in working with a wholesaler because I just don't think I'll learn the ropes the way you need to make it selling P&C. Surprisingly, I can't find any decent agencies to work for in my area (Orange County, CA). Most of those that I'm finding are 2 or 3 person agencies, usually just a family working together and seems very insulated from everything. It's very hard to find companies that focus on commercial for some reason. Is this what you are finding? How many agencies were you able to talk to?

@bertolinoins: How would you suggest finding a good company? I've searched online, yellow pages, etc. Thanks.

I would search through IBA West (findagent) and your local business journal for the top 25 independent agencies in your city.

Treat this job hunt like you are trying to make a big sale. Do your research on the local agencies and see who may be willing to take you in and train you. Call marketing reps for the top commercial companies in California (Travelers, Hartford, Golden Eagle, Fireman's Fund, Allied, CIG, ACE,AIG, Chubb, etc) and ask them which agencies have a program to nurture "green" producers. It is very expensive and time consuming to bring somebody in and train them even if they are on strait commission... you have to give the agency a reason to make that investment.

You have to pay your dues at some point... I spent 5 years at a large regional "IJ top 100" agency getting a crappy split (30/30) but I learned from some real rainmakers so it was worth it. If you are going to make selling insurance or owning an agency your career... then think of this first job as grad school where you will have to put in 2/3 years of hard work with little reward to learn how to be successful in this business.

 

[argyle]

I would search through IBA West (findagent) and your local business journal for the top 25 independent agencies in your city.

Treat this job hunt like you are trying to make a big sale. Do your research on the local agencies and see who may be willing to take you in and train you. Call marketing reps for the top commercial companies in California (Travelers, Hartford, Golden Eagle, Fireman's Fund, Allied, CIG, ACE,AIG, Chubb, etc) and ask them which agencies have a program to nurture "green" producers. It is very expensive and time consuming to bring somebody in and train them even if they are on strait commission... you have to give the agency a reason to make that investment.

You have to pay your dues at some point... I spent 5 years at a large regional "IJ top 100" agency getting a crappy split (30/30) but I learned from some real rainmakers so it was worth it. If you are going to make selling insurance or owning an agency your career... then think of this first job as grad school where you will have to put in 2/3 years of hard work with little reward to learn how to be successful in this business.

THANK YOU @Bertolinoins! You are so helpful. I started looking up all the info and companies you gave. How did it work when you left the company with the crappy split and wanted to take your clients with? Or did you just stay with that company and renegotiate your split? It is a bit scary to think that you will stay with a company for 3-5 years and then have to leave all those hard earned clients behind. Oh, and I have searched all over the IJ website but I can't find the Top 100 for 2009. Do I have to order that issue of the magazine?

 

[FLInsa]

I would search through IBA West (findagent) and your local business journal for the top 25 independent agencies in your city.

Treat this job hunt like you are trying to make a big sale. Do your research on the local agencies and see who may be willing to take you in and train you. Call marketing reps for the top commercial companies in California (Travelers, Hartford, Golden Eagle, Fireman's Fund, Allied, CIG, ACE,AIG, Chubb, etc) and ask them which agencies have a program to nurture "green" producers. It is very expensive and time consuming to bring somebody in and train them even if they are on strait commission... you have to give the agency a reason to make that investment.

You have to pay your dues at some point... I spent 5 years at a large regional "IJ top 100" agency getting a crappy split (30/30) but I learned from some real rainmakers so it was worth it. If you are going to make selling insurance or owning an agency your career... then think of this first job as grad school where you will have to put in 2/3 years of hard work with little reward to learn how to be successful in this business.

Perfectly said.

You can't expect me as an agency owner to offer a "newbie" a split of 70/30.

For me to offer someone a 70/30 split you've got to have 1. a ton of experience and 2. a lot of contacts. In other words; show me the goods and I'll show you the money.