Purchasing an Agency - Appointment Questions

[GeorgiaAgent]

I am working on purchasing a small, local p & c agency that specializes in non-standard auto. I plan on moving into standard auto insurance immediately upon purchase.....will it be very difficult to get appointed by companies such as Progressive, Travelers, Safeco, and/or The Hartford?

I have put together a really good marketing / business plan and have a pretty good sales track record working for a captive agent.

I am really taking a big step here and would like serious responses. Thank you!

 

[xrac]

I am working on purchasing a small, local p & c agency that specializes in non-standard auto. I plan on moving into standard auto insurance immediately upon purchase.....will it be very difficult to get appointed by companies such as Progressive, Travelers, Safeco, and/or The Hartford?

I have put together a really good marketing / business plan and have a pretty good sales track record working for a captive agent.

I am really taking a big step here and would like serious responses. Thank you!

I would be talking to those companies now to see what they say.

 

[warnerins]

GiorgiaAgent,

Putting aside State differences and requirements. In NM we started off with Progressive and one other carrier (scratch agency years ago). We had to prove ourselves as an indy before Safeco, Hartford, Travelers would even sit down with us to talk about an appointment.

You do have the advantage with puchasing an existing book and experience on your side. Some things you may want to ask yourself are....

If I don't get the preferred carriers right away, can I survive on the income that the existing carriers and book will provide.?

If you cannot get direct apointments with the preferred carriers is there an option for a brokerage type sutuation such as insurance noodle or one of the others that will fit into your plan in the interim?

And, as Xrac said get meetings with these reps from the preferred carriers and fined out where they stand. You can only control your situation, once you have all of the facts in front of you.

 

[djs]

I'm assuming you have experience in the standard auto market? Is non-standard new for you? I'm curious, because while I do both, I could never make a living on non-standard.

Of course, some depends on what the definition of standard vs non-standard is in GA (I assume that is where you are), and if there is a lot of room in the middle.

I have no real advice, I'm just curious about the motivation. To me, non-standard auto is an excessive amount of service work (standard auto is bad enough).... but then that is probably just me...

Dan

 

[GeorgiaAgent]

We have been looking at the non-standard agency because it has exsisting cash flow; if the cash flow is somewhat consistant, it will be a big help in the first year (we will find out the actual cash flow numbers later this week). I don't have a lot of experience with non-standard, but have a couple of friends who deal with it daily; I have heard some stories .


I have talked to a couple of companies concerning direct appointments, but I am really considering hooking up with a brokerage for the first year or two. After reading the threads on this forum, I have a lot of questions on how to go about this.

I didn't like the things I read on insurance noodle's website, nor what I read on websites of others mentioned in the threads. Does anyone have a broker or MGA close to Georgia that they can recommend? I would like to have access to the major commonly known brands pretty soon after the purchase.

Thanks.
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I kind of like the idea the Agent Secure site conveys.....anyone have an cautions or experience with this kind of company?

 

[SpeedAgent]

You can call or email me, I'm a wholesaler in GA and I would be happy to work with you on this.

Chris Maume
[email protected]
678.643.8415

 

[saieddie]

I'd be leery of a nonstandard shop. Most of my nonstandard customers are more trouble than they're worth. They pay late, need to get reinstated all the time, and are constantly price shopping. The good news is that some of them are only nonstandard for awhile and become good standard customers.

 

[lisar1208]

I agree with saieddie,
THey are alot of trouble, as an agent why would you focus on that when they just end up getting charged back after they cancel?

 

[GeorgiaAgent]

We were just going to use this business as a stepping stone.....but ends up the asking price is over 4 times the yearly cash flow. Deal is dead!!

Chris....I will keep your information handy, we will be reworking some figures, looking at other agencies, or considering going scratch.

Thanks everyone.

 

[saieddie]

What kind of multiplier were you looking for? I've heard 1.5 to 3 times renewals, depending on retention.
I don't think I'd go over 1.5 for nonstandard.