Starting a Commercial Insurance Agency from Scratch Advice Needed

[alwaysbelearning1]

Starting a Florida Commercial Lines Agency? From Scratch... Wow!

Totally Agree

Totally Correct

I mostly agree, however an argument can always be made that the best time to jump in is the time that most folks are jumping out. And that could be now.

Establishing lead flow, took me about 8 years. Now I have more leads than I know what to do with. What is constantly changing is the market. And the market is friggin tight. Im heavy on PL, but I do have CL and its reallllly challenging to find proper cover for lots of clients right now. And the thing that seems obvious, but no one will tell you - is that when you hang out your new shingle the number one thing people are likely to ask you for the is the type of insurance that is hardest to find.

To try and answer your question. You've got to get enough deals closed before you can start taking in referrals. Referrals are how most agencies grow [regardless of if they will admit this or not]. Getting to that point can be done with lots of ad spend, lots of appt setting calls, SEO development, in person advertising, guerrilla marketing, Key contact cross referrals - but its a grind no matter how you slice it for the first five years. I personally did this on the internet.

I wish you the best of luck.

So the issue isn't the leads but the actual companies suck right now…

Wouldn't the solution be to get more appointments or to join an agency network then?

 

[NY independent]

A) No carriers are appointing right now.
B) Aggregators have the same problem with markets....moratoriums and super hard markets affect them too.

 

[alwaysbelearning1]

A) No carriers are appointing right now.
B) Aggregators have the same problem with markets....moratoriums and super hard markets affect them too.

This is so weird.. I thought this was a lucrative business to start. I'm shocked to be honest.

When you say super hard markets you mean the prices are just not competitive??

This business seems to entirely be based on timing. If the markets are good then I assume we'll be having a different conversation.

 

[marindependent]

Think of it as being a hot dog salesmen with no meat and no buns...but you do have two day old stale sauerkraut in a paper wrapper that costs three times as much as the hot dog with the sauerkraut used ot. Also you are low on mustard and have not seen ketchup in weeks. Does the client want or need sauerkraut in an old wrapper? No.

When we say super hard market we mean often there is no suitable solution and if there is one, it can take dozens perhaps even 20 submissions to find out. And when the client finally sees the price, they likely cant afford it.

 

[Allen Trent]

Chances to start a scratch agency are between slim and none.. None of the good or great carriers will appoint you without a track record or success & competence in commercial markets. Likely best joining an existing large commercial agency with lots of carriers & infrastructure

 

[alwaysbelearning1]

Think of it as being a hot dog salesmen with no meat and no buns...but you do have two day old stale sauerkraut in a paper wrapper that costs three times as much as the hot dog with the sauerkraut used ot. Also you are low on mustard and have not seen ketchup in weeks. Does the client want or need sauerkraut in an old wrapper? No.

When we say super hard market we mean often there is no suitable solution and if there is one, it can take dozens perhaps even 20 submissions to find out. And when the client finally sees the price, they likely cant afford it.

I agree. So just to clarify, if appointed or in a network what you're saying by "no suitable solution" is the prices are insane correct?

 

[alwaysbelearning1]

Chances to start a scratch agency are between slim and none.. None of the good or great carriers will appoint you without a track record or success & competence in commercial markets. Likely best joining an existing large commercial agency with lots of carriers & infrastructure

So it's slim to none even if joining a network? I mean this is not easy, but not rocket science. It can be learned. I'm genuinely curious so I can make an educated decision.

 

[Allen Trent]

So it's slim to none even if joining a network? I mean this is not easy, but not rocket science. It can be learned. I'm genuinely curious so I can make an educated decision.

historically. starting scratch in a network does not give you access initially to the top carriers. Top carriers are much more selective of who they let write them. So, many of the networks only grant start up agents with 2nd or 3rd tier carriers.

the biggest issue today is that it takes weeks, even months to get some commercial carriers to even get you quotes or tell you if they even want to make an offer. They are way more selective of not only the risks they want, but what agents/agencies they put as high priority when there is limited time & resources in this historically crazy marketplace of late

 

[alwaysbelearning1]

historically. starting scratch in a network does not give you access initially to the top carriers. Top carriers are much more selective of who they let write them. So, many of the networks only grant start up agents with 2nd or 3rd tier carriers.

the biggest issue today is that it takes weeks, even months to get some commercial carriers to even get you quotes or tell you if they even want to make an offer. They are way more selective of not only the risks they want, but what agents/agencies they put as high priority when there is limited time & resources in this historically crazy marketplace of late

Wow so there's a massive barrier to entry. I don't think this is a good idea for me anymore…

I mean if I can't get access to carriers… then there's nothing to do. How does a new agency even gain access to them?

What if I buy a book of business?

 

[Allen Trent]

Wow so there's a massive barrier to entry. I don't think this is a good idea for me anymore…

I mean if I can't get access to carriers… then there's nothing to do. How does a new agency even gain access to them?

What if I buy a book of business?

Yup, buying a book is one way, but lately you have to outbid the private equity firms that have been buying up tons of agencies the last decade

Best option might be to find an existing agency withan aging agency principal as a producer & try to get an agreement to be able to buy in over time, etc