Possibility Of Starting My Own P&C Brokerage

[FLInsa]

Raphael my friend, since advice is free here it goes:.

#1. Don't rely on your family members or best friends too much. Everyone says they will "give" you their policy, but when the real time comes to sign that AOR or give you a check.... you know what happens. It is just human nature. Develop a strong and sound separate marketing plan instead.

#2. You don't yet have the P&C experience to succeed on your own. It just goes back to common sense. Would you go skydiving without an instructor if you've never skydived before?

#3. Do yourself a favor and don't become a "jack-of-all-trades-agent". Pick a few niches/industries to target and learn them inside/out. Know who your competitors are and which one of your carriers you can count on to be competitive.

#4. I think it is great that you are willing to hit the road and knock on doors, but your success doing this will be limited at best. You need a marketing fund. For example, I spend on an average month $6,000 - $8,000 on marketing which covers direct mailers, magazine ads, trade shows, and etc.

Get involved on your local Chamber of Commerce. Sponsor golf tournaments and other local events. Get the name of your agency out there.

#5. Don't work out of your house if you want to really be taken serious by your clients and/or carriers/marketing reps. Instead find a local small professional office and grow out of it.

#6. Invest money on a good looking website. Please don't create a website that looks like a 12 year old did it because that is what your clients will think. Your image in this business is important and a proper designed website goes a long way in setting the image of your agency.

#7. Last but not least, you will need competitive carriers to compete in this marketplace whichever road you choose to take. Don't go to war with a BBgun.

Good luck again.

 

[OCinsurance]

I would be happy to quote your e and o for you if you would like. I can email you an app so that you can see potential pricing. I am licensed in 37 states.

 

[Bertolinoins]

It won't work because you are trying to build a skyscraper without a foundation. You have no insurance background or experience but think you can jump right into agency ownership. I network with well over 100 successful agency owners and big producers at large national and regional agencies and not a single one of them started in the industry as an agency
owner.

It takes roughly 10,000 hours to become an expert in any complex topic... If you are bright and dedicated to learning the business. Why would a good client (clean loss ratio, good premium, good payer, etc) do business with a guy in his early 20's with limited market access and market knowledge and no experience in the industry working out of his house? The competition for those accounts is stiff and talented. That leaves you writing a bunch of high maintenance slop business ( losses, bad pays, cancellations and chargebacks) that will drive you crazy and keep you broke. The accounts you will be able to write as a green agent with limited resources are not accounts you will want to be dealing with 3+ years down
the line. The book of business you think you are building is slop that won't be worth much to you.

Go to work for a good direct writer with a strong training program (Federated, Sentry, universal, etc) and learn the insurance side of the business for a few years. Take INS 21-23 and the CIC institutes. Learn the business and make your mistakes on somebody elses dime while they are paying you. Build up a database of 2500 prospects with X dates. Save your money and avoid debt.

I am not saying you will never be able to own your own agency... but you need to build a foundation first. Without a strong foundation you are setting yourself up for failure... or at the very least you will spin your wheels and waste a lot more time than it would take to do things the right way.

You need to pay your

 

[insurancequoter]

Raphael,

Be prepared to starve for at least 2 years. I'm not aware of any P&C agents that started independent selling only P&C, with 0 policies and are still in the business for 2 years.

You're making an average of $12 monthly on an Auto Insurance deal. TAKES A LOT OF AUTOS to add up any type of income.

LIFE, HEALTH 1st then cross sell P&C in my opinion.

Greetings,

This is very sound advice, starting out will be very difficult. Have you priced an agency system? + E & O, +GL, +phones, internet etc.

Before you start out, you're in the hole and selling $10 monthly commission policies will take a while to just break even. Meanwhile your negative balance keeps getting greater as the first months sales most likely will not equal or exceed your monthly outgoing, nor will the second or third and so on. Unless you get paid advanced commissions, most companies that pay as earned will take 30 - 120 days to pay you.

Lead generation can be a real bugger. How do you plan to do that? Telemarketing? Cold Calling? Mailers? Yellowpages, etc. All either very expensive as far as time investment or money and the return difficult to control because each marketing / advertising media works differently than the next not to mention, you are trying to do every aspect of running an agency completely bu yourself.

LOL, wow...Now with that said, I will have to say that it is Possible, I (we) did it and are still doing it celebrating 4 years in business this December :-)


Dean

 

[PotentialFarmer]

I'll tell you the long and short of it. I just celebrated (and I use that term loosely) my 1 year anniversary of agency starting. I've been in Insurance (life/health) and finance for the sum of 11 years. At 31 years old with a wife my main target clientelle still think I don't have enough gray hairs to instill confidence. I eeked out a living year 1, starting to get renewals this year. Your friends / family you think will launch you . . . trust me, for the most part they wont. Half the people you'll be marketing to "friends", they have another friend who already handles their insurance . . . a lot of them and since I know your 22 will say oh, its my dads friend and he takes care of all of our family stuff, or my dad pays for it, or sure you can quote me (the worst) cause then you do the work and they'll see a 15% (go geico) discount and say oh, so you can save me 10 dollars a month, nah, I think I'll just stay, I don't wanna piss off my current broker cause he took care of a lot of my accidents, paid claims, I've got history with him, he's cute, I like going in to see his cute CSR . . . . any number of these excuses. I'm not saying I didn't close business, I'm still on this site and I'm still "eeking" out a living, but I had a decent income stream coming in monthly and caught a huge break getting involved with some private money guys and a few of their dealings with pro atheletes/movie stars/affluent people and trippled my monthly premium intake from 15000 to 45000. To be honest that was luck, if not I'd have scrapped the plan. Of my friends that signed up I've had several cancel policies, time wasters and much more headaches.

If I didn't make a couple very lucky things happen, have a support mechanism and slightly different than you, have several years in business experience and a little salt'n'pepper hair I'd have been sunk soooooo quickly. Figure starting out like this, 3K E&O + 6K Marketing (Minimum) + 3K Superior Access (You were talking about 15% commissions, that doesn't happen without their Private Client Service PCS at 250 minimum per month +) is about 12K your shelling out. Now do the math from your earnings. Lets say you are AMAZING at sales and marketing, you close 25 policies per month, average in industry is 100 per policy, its actually pretty fair, especially to start. So 2500 per month, makes for 30K for the year, minus your 12K that leaves you 18,000 to live off of. That's 1500 per month and that doesn't include taxes, 15.6% minimum on self employment tax etc. etc. around 4-5K +++ So you're looking at making 14K per year minimum, and that's not even going into the idea of getting your own Health insurance on top of that, even if your VERY cheap, for comparable support of what you'd get from a decent "learning" job you'll pay another 2K out of pocket. Can you live on 12K per year? I know I couldn't. Not to discourage, but hey, I've been drinking tonight in celebration of making 10K so far this week, I'm done for it other than checking in with the secretary and golfing . . . (kidding, I'm up late thinking about what I can do next to keep the lifestyle I want for my family) Get use to it

 

[insurancequoter]

Potential Farmer,

Very interesting take, however true it may be. If it was easy to do and inexpensive everyone would be doing it.

 

[RookieProducer]

I have been searching for the right relationship. I have a ton of contacts and large book of business that I can develop. I want to own my accounts and eventually either partner up as a co-owner, or be able to open my own brokerage in 5 years....

You get to make a lot of money from me, and I will keep the accounts I open with you, even if I go on my own, as long as we have an agreement that I will be paid on the business I bring in.

This is fair, since, I have no salary or benefits, and am bringing in my family and associates who own over 1000 buildings in NYC.

I can be reached at 646-261-6044 to discuss or at [email protected]

Please contact me if you are looking for someone that can drum up a ton of business.... I have dished off a lot of business in the last 2 months, as I search for the right relationship...

 

[OCinsurance]

Overall, when I look back, I think that a key part of it is having the drive to succeed in business and to have a passion for insurance. I love our industry and the coverages that we can find for her customers. Today, I find myself with a full staff and solid direct appointments.

 

[Guest]

I have been searching for the right relationship. I have a ton of contacts and large book of business that I can develop. I want to own my accounts and eventually either partner up as a co-owner, or be able to open my own brokerage in 5 years....

You get to make a lot of money from me, and I will keep the accounts I open with you, even if I go on my own, as long as we have an agreement that I will be paid on the business I bring in.

This is fair, since, I have no salary or benefits, and am bringing in my family and associates who own over 1000 buildings in NYC.

I can be reached at 646-261-6044 to discuss or at [email protected]

Please contact me if you are looking for someone that can drum up a ton of business.... I have dished off a lot of business in the last 2 months, as I search for the right relationship...

Sounds a little desperate

 

[AgencyEquity]

Hello forums,

I've been floating around reading all the useful and insightful information around and am curious about the possibility of starting my own P&C brokerage as soon as I'm finished with my licensing. Before some of you start this is not a "how do i start a brokerage?" question but more so a feasibility question where I hope people will help me think about future road blocks that i have not thought through yet. So here we go....

I have a lot of experience in new client acquisition and retention as my current occupation is B2B cold call sales. I also have a lot experience in recruiting and training of individuals to expand my business come that time. I am thinking about starting my own brokerage. Now most people will say after licensing, get a job working with a broker and learn. Aside from learning how to write up apps, product knowledge, and sales experience i don't see what the point of splitting commissions with someone else as I am already proficient at 2 of the 3 and learning PK is easy. My plan is to contract with a company like Superior Access, until i can establish my own direct appointments, and using my knowledge of client acquisition and direct marketing techniques build my book of business. I don't mind dropping $3000 on E&O. I plan to start by doing auto with friends and family just to learn how to write apps and develop a system, not as an intended source of income, before i start actually marketing to the general public. I plan to primarily target my markets directly and quote over the phone so i will be working from home. I know its not supposed to be easy so my question is what flaws do you see in my plan? Thanks!

-Raphael

While not to this extreme, this would be like someone wanting to become a CPA or doctor and not getting the proper education or experience. It's a disaster waiting to happen, there is a lot of little things you need to know and there are a few big things you need to know. At the very least, go with a direct writer like Farmers and learn off them for a couple of years before going Independent. Also very few E&O carriers if any will give you insurance without prior experience, let alone you are setting yourself up for legal action because you will be prone to making errors due to lack of knowledge about some insurance specifics. It's like anything else in life, you need to pay your dues before you really figure things out. I will also give you one example were you may go wrong (one of hundreds of scenerios), let's say you had a client has a vacant home that he need to insure. You place it with a preferred market not knowing the rules on this. There then turns out to be a claim and it's not covered, that is because you may be unfamiliar with coverage exclusions and limitations on a vacant property. Again, this is one of hundreds of examples and you will see yourself in court before you know it. Nevertheless, this does not mean our industry does not welcome newcomers, you just need the expeirence and I hope you get it vs. choosing to burn yourself sooner or later.