Looking to Start an Independent Agency

[Vespini21]

Hello,

I am new hear so any advice would be great. I am currently an P&C specialty lines underwriter in Wisconsin. I feel I have a decent grasp on the insurance industry as whole. I was recently offered a position as a captive agent but I'm more interested in starting my own agency. I just got licensed for P&C, for the previous mentioned position. I figure why pay a captive "carrier" up front, basically to use the name when, if I apply myself, I could do this on my own. I'm well aware that of all the marketing, forming a business entity, etc. I guess my big concerns are, 1.) Would it be a mistake to try this on my own? 2.) Would it be smarter to start as a captive agent? The trainer is paid for but there is a finance plan that I don't want to regret. 3.) How hard is it really to get a contract with a carrier just starting out? I've been looking at using Insurance Noodle or Superior Access to start out and build a book. 4.) Is E&O for less my only real option for E&O insurance? I have completed INS 21 and INS 23 would that help at all?
I'm at a point in my life where I need to make a decision and go with it (my wife is 3 months pregnant and I want to make sure its the right one). I'm sure I'd be operating in the red for awhile but I do have some funds saved up. Any help/advice would be great.

Thanks!

 

[wjw0006]

If your wife is three months preggers and you have a chance to go captive, that's what I'd do. Yes going indy is the best long term bet, if you make it long term.

From the feedback that I've been given, using Superior Access/Noodle to build a book is much harder than it appears...

 

[Tearmann]

Trying to get contracted direct in P/C is very difficult - most of the major players want you to have an existing book of business. If P/C is where you want to be in the industry then going captive or paying the fees to an agency is your best real option.
If you choose to add Life/Health to your portfolio then you have options to offset the low contracts in P/C at the begining while your paying your dues.

 

[Vespini21]

Thanks for the feedback. I really appreciate it. I have since turned down the job for the captive agency. It was the AmFam agent in training program. Here's their deal... Although you don't have to make an initial investment, like you would with Farmers or State Farm, once you "take over" an agency they basically finance your paycheck. So you're getting about $3,600 a month, which is financed. The typical time spent on the finance plan is 1 year. I figured I'd rather invest in myself and have access to more carriers/options rather than commit to $43,000, which is, at least I'm pretty sure, how they get you "locked in". Oh well, life is all about decisions, I made one, I'm not looking back. I am mainly interested in P&C because that's what I know. I've been underwriting specialty lines for about 3 years now and feel I have a good grasp on coverages. Well, thanks again for the input.

 

[Guest]

the main concern for me is youre expecting a kid. Just remember starting a business is an investment and investments take time to become profitable if ever. My question is can you afford not to pay yourself or pay very minimally for 6months to a year not including the initial amount of money you spend to start the business?

Having a business is like having a kid it will take up a lot of resources. Tread lightly with both.