Starting a New Subsidiary

Jul 9, 2015

  1. MrTris
    Offline

    MrTris New Member

    Posts:
    2
    Likes Received:
    0
    Hello all! Semi new reader, first time poster. I'm more used to car forums where I'm definitely "expert" status, this is all new to me - Looking forward to learning and later helping others get their dreams off the ground. Meanwhile, I need help sprouting some wings -

    Here's a brief overview of my situation:

    Myself and my boss are the only two licensed producers in the company, which is a regional heavy equipment dealership. While we "offer" an insurance product that's "attached" to our finance program, it's incredibly non-competitive to other products in the market. Any time we do sell a policy with a machine, which is rare, it's for a very short term and the customer eventually finds their own insurance, either through another entity, or, most often, with their existing business carrier. In all the deals I've done in the last 18 months, I've yet to quote a customer -- that's how awful it is. We're talking semi-unknown foreign carrier that has an agreement with our sponsor. As far as I know, we are not exclusive (Despite that my company has paid for my CE and renewal, I have been given permission to seek and/or start any self-employment projects in the insurance industry, should I so choose.), so, ditching said carrier shouldn't be an issue, unless our sponsor wants to aggressively pursue this same venture and revamp this program/agreement. At this time, I am told there are no plans.

    I currently hold all four licenses in my state, my boss has all four as well, with non-resident licenses in 8 western states where we do business.

    Our organization is quite diverse and very succesful, with at least 4 other entities/subs that we are aware of, and we know there are a handful of others. I'm seeing an opportunity to develop a new revenue stream by proposing to form a new subsidiary to sell benefits to the other entities, such as how banks and hospitals do.

    For now, we'd like to start simple -- Grab an industry-appropriate P&C carrier and start rolling some LDW premiums for our rental departments where they exist within the subs. Later, I'd like to make our way into Life/Health/Disability and Worker's Comp (where available) so we can start offering unrivaled benefits packages in our industry. This is my biggest piece of the puzzle, here, as, our organization is reknown for taking care of its people.

    I'm a bit stuck, though, hence, why I need a little help.

    I'm unable to find any case studies or empirical data on when an organization chose to form a new subsidiary for the purposes of brokering insurance services to its other organizations under the parent. The only one I was able to find that was somewhat relevant was for a non-profit hospital in NY, and the subsequently boring NY DFI documents on the tax classification and liabilities of said entity being able to share its profits with a non-profit entity.

    Question: Anyone ever been involved in forming an entity under their existing organization for the purposes of brokering insurance services for both the parent and subs, as well as their respective customers? If so, could you tell me a bit about how that all got started? Obviously there were challenges along the way --What were they and how did you overcome them?

    In reading the New Agent threads, I have come to understand that appointments are hard to get, and can be cost-prohibitive to the average Joe Producer; do the circumstances change when you're a large, well-established organization who's bringing large groups and guaranteed business?

    I have SOME business acumen, though, since I'm here, it's obviously not enough to fully tackle what I've got in mind -- at least not yet. What I DO have is ambition, persistence, and the ego to think I can pull this off in five years or less.

    Based on what I've told you here, does anyone have any constructive pointers, directions, or resources that might assist me in this endeavor?
     
    Last edited: Jul 9, 2015
  2. Cash
    Offline

    Cash Guru

    Posts:
    714
    Likes Received:
    5
    State:
    South Carolina
    Can we get a TL;DR?
     
  3. MrTris
    Offline

    MrTris New Member

    Posts:
    2
    Likes Received:
    0
    Sure. Lemme help you with that:


    I take it you saw a squirrel? Or were you just attempting to exercise your newfound usage of TL;DR? :D
     
  4. Cash
    Offline

    Cash Guru

    Posts:
    714
    Likes Received:
    5
    State:
    South Carolina
    You see this with associations. Like the dental association will sell insurance to their members. I don't know of any for profit business doing this though.

    Getting any type of life insurance appointment is a lot easier than with P&C carriers. So I would start there and see if you like it. If it goes well you can always break away from your current job and just name you agency after the industry, like GEICO and USAA.
     
Loading...