Need advice - starting an insurance agency in Texas

[texasnative]

Hi guys,

I love this website! And the advice folks give each other! And I have a few questions from you experienced agents, if you don't mind helping me. =) I am starting an insurance business no later than Jan 1 2019 ...

About me:
- I am from Texas, where I own a diversified and successful real estate investment business in Texas, that I am going to continue to operate & grow, and I am going to get into the insurance business as well as it seems like a perfect complement to what I am doing already.
- It's not just me / I have a staff and a real office of course
- I love the game of business and sales, and I have experience owning multiple businesses in the past. It's in my blood. It's my hobby. It's my passion (after God & family of course!!!)
- I have a *zillion* HO/dwelling policy referral sources, from friends I do business with already, that are already ready to send me business. Many of these people I have sent business to for years, and now I can get some from them. This frankly is what makes me excited about this business more than anything <!>
- The basic business items (business name / office location / website / legal entity / etc / etc) is already taken care of, or will be taken care of shortly. I even had an agent friend approach me about buying his book of business, which I plan on doing as long as we can work out the price (it sounds like it'll be fine).
- Not that it matters, but I have plenty of cash reserves for advertising/growth & I live off my real estate investments, so that will let me grow the insurance business much faster...than if I was starting from scratch

My target customers:
- Will be small business people / real estate investors
- And consumers (I want the meat & potato automobile & HO policies)
- Note: I want to be open to selling everything, but I do not really care to sell health insurance or financial products (beyond life insurance). However, I am open to ideas / feedback on that

Long term plans:
- Get licensed myself (it's already in the works / will be done shortly)
- Buy a book of business and/or rapidly grow a new customer base through referrals and advertising
- Bring on a licensed producer immediately in early 2019, or have one of my existing staff members become licensed
- Add producers / servicing staff as needed ... and continue to advertise & build the referrals so we can grow grow grow

Where I can use some advice:
- QUESTION #1 - I am in the process of getting my P&C General Lines license now. I should be done fairly soon. Should I get my Life & Health General Lines license as well? Or just my Life license (which seems faster/easier)? As I mentioned above -> I want to be open to selling everything, but I do not care to sell health insurance or financial products (beyond life insurance). I dread the idea of my customer going to someone else for a single policy...and that guy using that single policy to later get all of my customer's business (LOL!)
- QUESTION #2 - Have you guys had luck with direct mail to obtain new consumer-clients? Any tips on that? I can pump an easy $4k, $8k, whatever a month it takes into direct mail / postcards / etc, as I have a ton of experience doing that with the real estate world, and would love to keep using that advertising medium.
- QUESTION #3 - Have you had a lot of luck with Internet advertising - e.g. Google / Bing advertising? Any tips there, specifically related to insurance? Note I will have a professionally designed website / etc already setup.
- QUESTION #4 - Do you have any recommendations for surplus lines insurers that will let you resell their dwelling products (maybe geared toward real estate investors)? I know of one now, that I actually use with some of my properties, but they are direct to the real estate investor - like Geico is to a consumer. Note: for people with 50, or 100 properties, these surplus line carriers can save the investor a fortune. And also they tend to pay out OK --- I've had a claim or two myself -- haha! And I would *not* recommend them to consumers / just experienced real estate investors.
- QUESTION #5 - Any tips on how I can write through a ton of carriers? I initially considered going with Goosehead, but I have zero interest in paying 50% in my renewal commissions. No thanks. No way no how. BUT -> I do want to be able to offer 20, 30 or 40 carriers to people - without going through 20, 30 or 40 websites. I have heard companies like Combined Insurance Underwriters (if I got their name right) will let independent agents write through tons of companies & their fees/etc are reasonable. The guy that wants to sell me his book of business said he'll help me with this, but I want to hear from you guys as well.
- QUESTION #5 - Any other tips???

Thanks!

 

[Mike007]

You pretty much have everything set and based on your information, your odds of succeeding is extremely high.

If you are able to get Life license without the Health attached to it, just do Life. Makes your study and the test easier too! By avoiding the Health license, my Life test was easier and my hours for the Life class was shorter as well. 32 hours of class vs 52 hours. You can always get Health license at a later date if you wish.

Get your Life ASAP. After insuring a home, you can offer Life Insurance to protect that Mortgage aka Mortgage Life Insurance.

To write for a lot of carriers, you'll need to find an insurance cluster that fits your needs. There are plenty of them around, just do your research. Most require a buy in ranging from $1,500 to $10,000. Contracts can range from 60%-90%. The higher the buy in fee, the higher the contract. Find one that allows you to bind a policy. Ability to transfer or move out on your own without much restriction. Don't get into a contract with an organization that will not let you do business for years if you leave them.

My suggestion is for you to hire an experience producer to help you. You'll need someone who knows the ins and out of insurance to help you until you are knowledgeable enough.

 

[RichardCO]

Mike007 is right on all points, but let me expand on a few .
#1 Absolutely get Life License asap so you can multi-line sell, it will greatly improve you retention
#2 I believe industry average on direct mail is 1%, follow up calls increase the response to 2%
#3 Social media seem to be very effective but I don't have hard numbers on cost to acquire
#4 Spend time researching companies offering carrier access, it's hard to justify the different fees charged. Pay special attention to non-compete clauses, exit fees, bonus participation and renewal commission.
#5 If you're buying a book you'll certainly need experienced staff.
Good Luck!

 

[texasnative]

Thanks for the feedback guys. It took longer to get things going with all the carriers than I expected, but that worked out. I've already started writing policies and so far so good. It's growing slowly but surely exactly as I expected, and since it's not my main source of income that's perfectly fine. It's just a long-term, build it slowly but surely business

 

[Corpuschristi]

What part of Texas are you working?

 

[txdude]

Where in Texas are you located?

 

[texasnative]

I am in Dallas/Fort Worth

 

[txdude]

Where in DFW? I’m in Fort Worth. Did you start your own agency?

 

[Rulls]

Did you join a cluster group or alliance? What organization did you join? Would you recommend them?

 

[TinManJam]

Were you able to get up and running and how have the first couple of years gone.

Thanks

Curtis