Scratch Agency Questions

[Nowiser]

Good morning!

Been reading here a lot recently and there is some good stuff. Long story short I am investigating starting a scratch agency, I do not have any insurance experience, but currently hold my real estate license.

My question is this, when it comes to the interviews and reviewing business plans, will they frown upon me having another producer right off the bat? Is that something to include, or something to leave out? How long does a said company want you to practice before you have someone else producing for you?

Thanks in advance, I am sure I will have more questions here soon enough

Gotta get back to review, my P and C test is in an hour and a half

 

[PhilL]

Best to you. As for brining on a producer initially, assuming that the person has P&C experience, a good reputation and you have some degree of management experience, marketing that person to potential carriers can only help aid in your efforts. It is a positive, as it establishes viability for you, in the eyes of many carriers. They want to see an experienced person in-place, to process the business, at the very least.

The hardest part for you will be in finding P&C carriers who will want to work with a "start-up" operation. Some carriers might be willing to talk to you about an appointment if they know the producer/CSR from his/her background and may have worked with them at another agency. It is possible.

However, more than likely, you will run into stone walls after your carrier inquiries. Then you should consider searching for 'premium aggregator' insurance organizations that might be able to help you get access to some decent markets. When you sort them out, be sure to ask for existing agency member references and call the Agency Principals of each. Ask good questions. If you decide to go explore this route, by all means, make sure that you fully understand the different programs that the premium aggregators are proposing, including all costs and have an experienced person review the respective contracts for you.

Let us know if you need more guidance.

 

[xrac]

Good morning!

Been reading here a lot recently and there is some good stuff. Long story short I am investigating starting a scratch agency, I do not have any insurance experience, but currently hold my real estate license.

My question is this, when it comes to the interviews and reviewing business plans, will they frown upon me having another producer right off the bat? Is that something to include, or something to leave out? How long does a said company want you to practice before you have someone else producing for you?

Thanks in advance, I am sure I will have more questions here soon enough

Gotta get back to review, my P and C test is in an hour and a half

Most of the people that I see who want to start scratch agencies with no experience are not too successful. It can be done I suppose but it is not easy.

 

[Olivebranch]

Gotta get back to review, my P and C test is in an hour and a half[/QUOTE]

Good luck with your P & C exam.

I kept second guessing myself and changed my answers on my P & C exam. After all that I took law courses and aced those.

That explains a lot.

 

[Nowiser]

Well there was a lot more commercial than the review led me to believe, I was only a few points off.

Thanks for the advice guys.

I think I have a better than average shot, I have a large independent agent in the next state over who is planning on getting me an interview with his company, as well as coaching me on what to say. As far as a business model goes, I was born and raised in the area and all my extended family is here, which I think helps. I have my real estate license here in town with the 2nd largest company, the agents currently on my team (3 of them) would write letters saying they would refer to me. I have a lead on an office that would be in the same building as a financial company, they have 5-6 planners and the owner would most likely write a letter endorsing me as well. What are some other things I can do to make myself appear to be more marketable to the rep?

 

[Guest]

Well there was a lot more commercial than the review led me to believe, I was only a few points off.

Thanks for the advice guys.

I think I have a better than average shot, I have a large independent agent in the next state over who is planning on getting me an interview with his company, as well as coaching me on what to say. As far as a business model goes, I was born and raised in the area and all my extended family is here, which I think helps. I have my real estate license here in town with the 2nd largest company, the agents currently on my team (3 of them) would write letters saying they would refer to me. I have a lead on an office that would be in the same building as a financial company, they have 5-6 planners and the owner would most likely write a letter endorsing me as well. What are some other things I can do to make myself appear to be more marketable to the rep?

I think it is going to be much more difficult than what you anticipate. Carriers don't like start ups without a proven experience in P&C. They want to make sure you understand how to find desirable business, manage your loss ratios, etc. Many carriers are fearful of newbies because they have a tendency to write any and all business they can find. Insurance companies don't want that, they want you to pick and choose business that is profitable.

The best chance you have is to start as a captive agent with a company and do that for a few years. You'll learn the business, prospecting, etc..

After a couple of years as a captive agent it will be much easier to transition to independent because you can demonstrate to the companies you have an understanding of the business and find them business that they will want.

Good luck to you.

 

[PhilL]

Nowiser: Dubya is giving you solid advice here, especially with regard to approaching the various captives, most of which are looking to add agents in many States. (Not sure about Indiana.) You will get a chance to learn the P&C business in this way.

 

[Reign]

I am in the process of going the same route, but with some different circumstances.

I am the Principle of a 3 person RIA.
Our children are now in school and the wife wanted to come back into the workforce.

She started with a L&H licenses and has done ok out of the gates.

Her mentor suggested she add P&C. We are in talkers with some companies and my hope is the see the value of the RIA and cross selling opportunities.

Going to work for another company is not ideal.
This is the direction of this industry-full service financial offerings.

All the big companies now offer insurance, investments, banking, and many are doing mortgages. Our RIA is moving in this direction.

 

[Nowiser]

I have an offer to join an Independent agent in my area, but I hate no compete clauses and do not want to spend the time building someone else's business, to then have to go off and start my own but not being able to take anything but my family's policies. I do not want to sound selfish, and understand the pros of working for someone else, especially in cost and experience. I guess I see the situation I am in with my family (young, no debt, no kids, wife has a great paying job) and see that now would bet he time to start from scratch. I hope that a company takes the chance, although I understand it is a long shot.

As far as a an interview/meeting would go, what are some suggestions of things I can do now before it to make myself more desirable.

Thanks for all the responses so far, it has given me some good insight and things to explore.

 

[PhilL]

Reign: It is smart to want to add P&C, to be more viable to your investments clients and become a one-stop solution for their insurance needs. It can be done without P&C experience but as you describe your current operations, generally speaking you will not be too attractive to the better carriers you will need. Among other requirements, they will want to be assured that you will be writing quality business, that fits their particular underwriting guidelines. Your financial products clients will no doubt be strong, in terms of quality of risks but most top carriers want to be convinced that you have an experienced staff, to service them with regard to P&C products.

One option for you is to hire an experienced CSR who has dealt with the better carriers and will help your agency be marketable to them. That can help you get some attention and the carriers may already know the CSR, which is usually a good thing.

Additionally, though not a total solution for you at first, you might consider hiring an experienced "high net-worth clients" producer or CSR, who already has affiliations with several of the companies that write that type of business. I have seen that work well for agents in your situation. You market & reintroduce yourselves to your clients as "high net-worth insurance experts".

Another option is to consider joining one of the various 'premium aggregator' organizations that operate in your State. Do some internet searching and ask some local agents agents who they are using. Also, check with the PIA and Independent Insurance Agents associations in your State, as to which 'aggregators' they might recommend. Some of these aggregator groups can provide you with access to some markets fairly quickly, even with your limited limited P&C experience. Just be sure to ask a lot of questions of them and demand clear answers, if you decide to explore this route. Also do extensive reviews of their contracts and get all your questions answered. Also, ask for and follow-up by calling local agent references that they should supply, to get a 'real world' feel for their programs, relative to you needs.

All the best to you.
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