New Agent...need Advice...P&C Vs Health

[Seattleins88]

I have been reading this forum site for about a week and have found alot great information. It would be nice to hear from a few of the experienced agents for some unbiased opinions on my situation.

I have been in mortgages the last 11 years and am switching to insurance. Already have my Life/Disability - WA State- working on my P&C. originally I was looking at P&C captive agent vs independent but I see so much info on health that I am now considering this field. I am used to 100% commission and have no problem putting in the hours required for success.

With the P&C, from the information I gather State Farm is a route to financial ruin. Farmers is a turn and burn on the agents. I am also considering Allstate and American Family. I do like the indendent side but the lack of knowledge in the field makes me leary.
Also looks like P&C is alot more account mainenance vs health.

If you were to start someone out on a new insurance career what would you advise? With all of the inormation you know now if you were to start your insurance career over what path would you take?

Thanking you all in advance!

 

[Frank Stastny]

I really don't know anything about P&C, only what I read here. What I read doesn't sound appealing to me but that may be because I have never seriously looked into it.

I started in life and health selling Med Supps. I am still selling Med Supp and right now only Med Supps. Knowing what I know now I would not change anything.

I guess I was lucky that my first venture into insurance proved to be a good decision for me.

 

[djs]

To compare life/health to P&C, you have to look at what the financial payout is, how it is structured, then decide which one appeals to you more.

I'll leave life out of this, but you can use the same basic concept as health.

Health tends to pay a large upfront, first year commission. Afterwards, you go to a lower 'maintainence' commission, but it does continue to pay residuals. You can build up a decent residual base in health, but most of your income will be derived from new sales, even several years into your career. Keep in mind, I'm talking individual health. Group health more aligns with P&C. Also, with individual, you submit the policy, hope that the underwriter accepts it, with a large part of the underwriting being unknown to you, since you don't have access to the reports. With mortgages, you had to deal with the underwriters, but till recently, you would have a good idea of what would be accepted and what wouldn't. Health works the same way, but its a bit like mortgages without being able to see the credit report upfront. You take the clients word for things, asking appropriate questions.

With P&C, the goal is the residuals. Sometimes there is a slightly higher first year commission, but it is usually in line with the renewals. You really build a business with the goal that the residual income will pay off in future years. You do a large portion of the underwriting yourself, so you'll have a high degree of acceptance (100% or so) of submissions being done. Most P&C agents live off of the residual income, including paying the office bills, their own salary, etc, and then fund growth from new business.

Health is a low volume business compared to P&C. You might write close to the same number of apps per week, but you'll need a MUCH larger book of business with P&C, but its also much easier to obtain a larger book of business.

Also, with P&C, you tend to need/want a staff person, which is frequently optional with Health. The staff person deals with all of the day to day changes on policies for you, such as lienholder changes/request, add a car, drop a car, take payments, make calls to remind people of payments, etc.

Dan

 

[VolAgent]

Here is something you might want to consider, what are you more passionate about? Do you get excited about life insurance, and talking about how it works, about health, or about home and auto? Is there one that you believe in more than the others, one where you can convey your belief system to customers and clients? Odds are, with everything else being equal, the one that gets you excited is the one you are most likely to succeed it.

Also, ask yourself this, how do you think you'll feel about your chosen field ten years from now. Will you be excited about designed that new life case, about checking out that new commercial building, or bored to tears by it all?

Now, all that said, based on what others have posted on here in other threads, it does sound like P&C is more capital intensive to startup. Generally you'll need an office front and maybe one staff member. Also, with the lower premiums and lower commissions, it can take time to build a self-sustaining income stream. It is always good to have money in the bank when starting a new business, but it sounds like P&C requires a bigger bank than L&H.

 

[Cranson]

I started with a captive insurance company and sold everything I could (I got a P&C and L&H license right away). I never understood why P&C people don't always cross sell Life and Health. Maybe they don't want to take the time to learn it but if you have someone you just sold home and auto to how hard is it to ask about their life or health insurance? My advice is to learn P&C and write as much as possible in the first few years while learning and selling Life and Health. You can make a good living as a captive agent but your growth is limited as compared to a true independent agent (meaning owning your own independent agency vs a captive agency). It's just harder without the proper training usually offered from a Captive company to start out as an independent agency.

Good Luck!

 

[Seattleins88]

Thank you everyone for your input. I am leaning independent P&C right now and have talked with a number of local agencies. Ideally I want to get my own appointments but I realize that takes time. The training you get with the captives is appealing and people do make money there but at the cost of having to follow corporate demands.

Can anyone suggest a few carriers that new agents can be appointed?

 

[redgo]

I'm in the Seattle area as well. If you want to go Indy I would take a look at working for an agency for 2-3 years. Most places I have talked to will require you to sign a non-compete clause and pay you around 40-50% on new business and 30-40% on renewals. I know of a couple places in Seattle and the Eastside if you are interested.

 

[Mark]

I would pick health over p and c.

 

[Seattleins88]

Can you tell me your reasoning why you prefer health over P&C? Also if you were to start in health what would you recomend as the best way to get started?

 

[JasonH]

I sell peronal lines insurance and in my opinion it would be difficult to start out being independent. You would have to have a very big budget to get started. With P&C you would have to spend a good amount on marketing, insurance and office space. You need to be available(or have someone available) for customer service. Some companies won't appoint you or give you binding authority without experience. Some don't offer binding authority at all to independents. I have zero experience with life&health, just what I have read on here but from what I can tell so far if you want to be independent it would be easier to start out in life or health. If you are set on P&C I would start out captive to get the experience. I write in over 40 states so for me it took awile to get all the different company and state guidelines down. If you are focusing on one state and a limited amount of companies it may be alot easier.