Opening a New Agency Questions

[stans28]

I know for all you seasoned agents out there, you probably get this a lot. Before I ask my questions I want to thank you guys/gals for helping people out the way that you do. I have been in the Life/Annuity business for 3 years with a captive company and have decided it is time for me to open my own agency. In the 3 years I have been in the business I have picked up an average of 1 million plus in premium each year most of which was life insurance due to the fact my company is not very competitive in the Annuity arena. I mostly work business and business owners, then work the employees of those businesses because I then have a built in relationship. I have decided to add P&C to my agency and have ran in to some stumbling blocks. This is where I need the advice.
I have read here (thanks again) and other places that you can't get appointed with the big companies until you have a book of business. I am trying to find a company that can help give me access to the bigger carriers and not sell my soul at the same time. I have looked at Insurancenoodle.com and they have a good set up, but if I were to get a direct appointment with a company they use, we will use Zurich for example, they would zing me for half of my commissions through Zurich for 2 years. I have had no luck finding another company that will provide access, back office support and a quoting engine without me having to be married to them for life. Is there any other company out there you would suggest? Additionally, has anyone had experience with insurancenoodle.com that they would be willing to share? Thanks again for any advice or help and I will return the favor when I am experienced.

 

[nyc2phi]

insurancenoodle would be o.k. since you are doing commercial. You don't have binding authority w/ the noodle so it can take a little bit to get that done and in commercial you have that time in personal lines you dont and wouldn't touch noodle w a ten foot pole if I was doing personal lines.

I would look into working with a cluster like SIAA or Iroquois. They instantly give you access to top carriers in your market. However there is a price invovled for this. Agency equity has good information in regards to this on his website www.agencyequity.com.

Another option could be to partner with an established p&c agency in your area, work out a deal where you can place business through him, take a cut, and when you are able to get contracts with your own carriers, take your business with you.

hope that helps

 

[stans28]

Thanks for the advice. I am going to be doing both personal and business accounts as the agents I will be bringing on focus on personal more than business. I have contacted both SIAA and Iroquois and will see what they have to offer. Would anyone be willing to tell me if expecting for my agents and myself to close 20-30 P&C cases a month each is low or high? I know there a lot of variables, but my agents are good cold callers, well rooted in the community and use a consultative sales approach that should allow us to sell multiple policies to each client. Thanks again!

 

[nyc2phi]

I'd say if you are looking at personal lines - 20 policies a month is standard and expected when a lot of these guys hire producers.

On the commercial side it's more about premium then apps. Something along the lines 20-30K in premium a month is also considered average.

 

[iiinycboi]

Thanks for the advice. I am going to be doing both personal and business accounts as the agents I will be bringing on focus on personal more than business. I have contacted both SIAA and Iroquois and will see what they have to offer. Would anyone be willing to tell me if expecting for my agents and myself to close 20-30 P&C cases a month each is low or high? I know there a lot of variables, but my agents are good cold callers, well rooted in the community and use a consultative sales approach that should allow us to sell multiple policies to each client. Thanks again!

Just make sure you read the contracts, most clusters have buy out clause and non compete. Do the math and think about your exit strategy too. I did the same process as you last year, and i ended up meeting my local MGAs which was better than the clusters. (my opinion) I got all the preferred carriers as sub broker and for carriers that i write with the most i got direct appointments.

If i had to do it again, i would get two or 3 companies and focus on 2-3 niches.

Everyone on this forum always say focus on niches, i didn't listen and did a shotgun i got 80 carriers, i write everything approach. So much headaches and work and master of none.

 

[stans28]

I'd say if you are looking at personal lines - 20 policies a month is standard and expected when a lot of these guys hire producers.

On the commercial side it's more about premium then apps. Something along the lines 20-30K in premium a month is also considered average.

Thank you for the averages. This will help me a great deal when looking at my financial plan.
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Just make sure you read the contracts, most clusters have buy out clause and non compete. Do the math and think about your exit strategy too. I did the same process as you last year, and i ended up meeting my local MGAs which was better than the clusters. (my opinion) I got all the preferred carriers as sub broker and for carriers that i write with the most i got direct appointments.

If i had to do it again, i would get two or 3 companies and focus on 2-3 niches.

Everyone on this forum always say focus on niches, i didn't listen and did a shotgun i got 80 carriers, i write everything approach. So much headaches and work and master of none.

Thanks. If you had to choose 3 or 4 to get direct appointments with, who would they be for personal lines and commercial? I have several contacts in construction, oil companies and manufacturing. My agents I will be bringing on also have contacts in these industries and trucking as well. Also, was your first year as painful as everyone makes it sound?

 

[RonRoberts]

Another option could be to partner with an established p&c agency in your area, work out a deal where you can place business through him, take a cut, and when you are able to get contracts with your own carriers, take your business with you.
hope that helps

While I was in the mortgage industry the hardest thing for me to do with a new homebuyer needing a mortgage was find a good P&C agent that provided excellent customer service. They always got the job done, but with very little personal touch. So, when I left the mortgage business I tried going to indy shops and no one was interested in letting me write business through them. Every response was the same in that they were only getting an average 10% commission and it wasn't worth their time to do a split.

I did the same process as you last year, and i ended up meeting my local MGAs which was better than the clusters. (my opinion) I got all the preferred carriers as sub broker and for carriers that i write with the most i got direct appointments.

How did you end up meeting your local MGA's?

 

[iiinycboi]

Thank you for the averages. This will help me a great deal when looking at my financial plan.
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Thanks. If you had to choose 3 or 4 to get direct appointments with, who would they be for personal lines and commercial? I have several contacts in construction, oil companies and manufacturing. My agents I will be bringing on also have contacts in these industries and trucking as well. Also, was your first year as painful as everyone makes it sound?

Yes, the first year, it was all about figuring out a system and finding out what you need and don't need. Most of it was finding out I didn't need this or that. Then slowly buying software etc...

Like I bought everything a agency should have, you know software, csr, stationary, letterhead plus all the essentials, all the fluff. I ended up getting rid of everything I spent money on and replacing it with something else down the road.

Don't buy anything until you need it. Or have a use for it. Keep overhead low or expense low.

The first year I was deciding how i wanted to bring in business and what type if agency I was. All in all it was wasn't that bad. Focus on learning and developing a system and image you want.

Carriers I wouldn't really know for your area. Youll find out quickly once you start writing business. You'll find out exactly who beats who and who beats you. Then those carriers are the ones you want.
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While I was in the mortgage industry the hardest thing for me to do with a new homebuyer needing a mortgage was find a good P&C agent that provided excellent customer service. They always got the job done, but with very little personal touch. So, when I left the mortgage business I tried going to indy shops and no one was interested in letting me write business through them. Every response was the same in that they were only getting an average 10% commission and it wasn't worth their time to do a split.




How did you end up meeting your local MGA's?

I colded call all the admitted carriers in NYC and asked for marketing rep. Discussed what they want and what they write. Then called and met some local competition and asked for help. They won't tell you everything, but you'll put it together and figure it out. Just be patient, it'll all work out

 

[stans28]

While I was in the mortgage industry the hardest thing for me to do with a new homebuyer needing a mortgage was find a good P&C agent that provided excellent customer service. They always got the job done, but with very little personal touch. So, when I left the mortgage business I tried going to indy shops and no one was interested in letting me write business through them. Every response was the same in that they were only getting an average 10% commission and it wasn't worth their time to do a split.




How did you end up meeting your local MGA's?

Finding the MGA isn't that difficult from what I can see. Finding the right MGA may be another story though. I did a simple google search and found several, then I went and did some research on all of them. I have it narrowed down to 2 or 3 and I am going to use access to markets that I want to sell as the deciding factor along with commissions.

 

[stans28]

Thanks for all the feedback. additional questions would be what would the average split be between agent/agency as I am going to bring on some agents other than myself. What percentage of business pays annual vs monthly? I can't get any help from local P&C people as I will be their competition, so this forum is great. Thanks again.