Start up agency and Smart Choice

Nvr2L8

New Member
1
I am looking to start a new independent P&C agency in PA. I have been licensed on the health/life side for 17 years working for a carrier, but am looking to step into P&C. I have been doing a lot of research and I understand that this route can have its challenges for new agencies but I'm willing to push through.

Since I am just starting on the P&C side, I recognized that I will have challenges with carrier appointments. I'm looking at options through clusters or MGAs to get started. Does anyone have any experience with Smart Choice? Any other recommendations for newly licensed agents with minimal to no P&C experience? TIA
 
I left the P&C side just over a year ago and of course needed the P&C during the transition. I looked into Smart Choice and was leaning very strongly toward them.

On the outside they are great - different agent programs, fees, 100% commissions, etc. but once I read the contract I saw so much more. Unless the contract has changed, the exit is awful. READ THE CONTRACT.

^You agree to wait 2 years to appoint with same carriers (and from what one carrier told me, they value their relationships with these big MGAs so they tread lightly with them), policies non-renew unless you roll, etc. For me, that doesn't work. Plus, unless you have a store front you have limited carriers....not to mention, the fees for their rater, etc.

What are the P&C demographics in your area? Credit history, driving records, etc.? Will subprime carriers be competitive?

After researching numerous options, I chose a local MGA. They take a cut of the commissions but I DO keep my book.

P&C is hard just like L&H is hard. I'm not trying to influence you. I don't know anything about your market but in my area, if I were to focus on P&C, I would go captive and be in it for the long haul.

In my opinion, it's a completely different game from L&H. With L&H, independent is the way to go - more options and impartiality with carrier contracts. With P&C, you and the MGAs will always miss out on the major players i.e. Allstate, State Farm, Nationwide, Farmers, etc. (at least in my area).

I hope I haven't discouraged you. Just read the contracts. Know your market and know which carriers best serve your market.

(edited for spelling)
 
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Well you have a decision tree here. I'll lead you down one path, but it is biased.



"Begin with the end in mind"- 7 habits of Highly effective people.



Decision #1:



What end of the Ins Spectrum do you want? if you answered P&C keep reading. If ''Other" wait for the others to respond



Decision #2: Captive or Independent.



Captive:

Pro: They will teach you a lot but inevitably you will go Indy at some point in your career. Another Pro, they will subsidize your life for a time.

Con: The District Manager will push too hard or force life on you or cut your commissions or change your contract, or, ext, ext. Your Captive will take rate increases and kill your production and you will have one price point while others dissect your book one policy at a time.



Independent: :

Pro: Control expenses. Get higher commission. Higher conversion. Higher retention. All of those factors equal more money.

Con: Starting out. Getting knowledge. Your personality type could sink yourself.



Decision #3:



Once you decide Indy is for you, in the next week or 22 yrs from now. The question will be how to do it. Your options include:



Buy an agency.

Join a group.

Become a producer for an agency.

Get direct appointments.

Get an agency that provides the back end service so you can hunt full time.



You decide which one is best for you.





Decision #4: What group should I join?



There are a lot. Consider the following. NOT ALL GROUPS ARE CREATED EQUAL! They range from good, better and best.



Any group claiming to be best of class should provide the following:

  1. Transparency
  2. Training and support
  3. Carrier Alignment
  4. and a great Contract
Give me a call, shoot me am IM. Good luck and have fun with your choices.



I have been in Insurance for 13+ years and the great thing in this industry is you can choose to never stop learning. Your learning curve is never ending. Meaning you will never get bored.
 
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