Starting My Own Agency What Needs to Be Done to Make It Happen and Successful

[DJM]

Hello all,

I have been selling health insurance captively for a year. I was in a management position while contracted.

I am getting sick of the captive atmosphere, and would like to start my own agency. i have done some research online, but like a professional opinion, what has to be done , and in what order, to successfully start an agency.

My goal is to hire sub agents and expand. if anyone who has already done this would like to help me out, feel free to email me at dj6388 at aol.com I appreciate any input anyone has to offer

thanks,

DJ
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I will be starting out in the health/life side of things. ive only ever sold health insurance, but have the life/accident/health license, and live in the state of michigan. also, i was wondering what some terms mean.

i know what imo, mga, and ga are
but what are some of the other ones?
also, i know the advantage of setting up as an imo grants you greater commissions from the ins carriers. so i ask you, how is it best to set up everything? going through carriers as an imo, and then setting up an agency to sell the products through? if someone can help me make sense of all this id greatly appreciate it. thanks again in advance,

email dj6388 at aol.com

 

[Todd King]

You can't just go and "set yourself up" as an IMO. You have to have the agents and numbers in place for that. Your best bet is to start out with good GA contracts in place and work your way up. You don't start out at the top!

 

[DJM]

You can't just go and "set yourself up" as an IMO. You have to have the agents and numbers in place for that. Your best bet is to start out with good GA contracts in place and work your way up. You don't start out at the top!

o, ok, ive done a lot of googling and such, and havent found a whole lot of info on what it takes to be an imo. I have found a lot of good info on on starting an agency, and i found this site, which has alot of useful information. i am also going to ask for some advice from some agency owners i know in the very near future, as soon as i understand everthing a little better. can you start off at an mga contract, and then hire people, or do you have to start off at a ga contract, contract some agents, and then move up to an mga? I'm getting very excited about starting this process, thanks for the advice, keep it coming. i do have just one question for you though.
Why cant we ALL just start off at the top

 

[Mark]

o, ok, ive done a lot of googling and such, and havent found a whole lot of info on what it takes to be an imo.

1st thing is you have to know your companies and your products. You will have to talk people into using them. You will almost have to be an expert on the products and the company. You have to be on call all the time to answer the agents questions.

You also have to co-sign for advancing for your sub-agents. Example, if an agent owes the company a debit balance and does not pay it, they will also come after the MGA, or IMO for the debit balance.

There is a lot more work in being an IMO then most people think. Also you have to recruit 5 to 10 agents to get one agent that will write business all the time.

You can't just show up to an insurance company and say I want to be an IMO. They want to see production reports and numbers or you have to build your way up to an high contract.

It is much easier to be an MGA , then an IMO.

 

[insuranceexec]

1st thing is you have to know your companies and your products. You will have to talk people into using them. You will almost have to be an expert on the products and the company. You have to be on call all the time to answer the agents questions.

You also have to co-sign for advancing for your sub-agents. Example, if an agent owes the company a debit balance and does not pay it, they will also come after the MGA, or IMO for the debit balance.

There is a lot more work in being an IMO then most people think. Also you have to recruit 5 to 10 agents to get one agent that will write business all the time.

You can't just show up to an insurance company and say I want to be an IMO. They want to see production reports and numbers or you have to build your way up to an high contract.

It is much easier to be an MGA , then an IMO.

I have to agree. The only other thing that I would add to this post is to make sure that you get a "pre-nup" or an up-front release on all of your contracts.

This will allow you to move your contract when ever you wish, as opposed to being "STUCK" with that particular IMO for a set period of time. This comes in handy when you find another IMO that will pay you more money. It also makes the IMO work harder for your business. Feel free to give me a call sometime. The others who have posted; Mark or Todd, would also be good people for you to talk too. I hope this helps..............

 

[myinsurebiz]

You can get the 120%'s and 125%'s - you just have to know where to look.

Me personally - I would rather have the 110%'s and 115%'s and get the support and the training.

I recommend you use Mark Rosenthal - he works with you personally and has the inside scoop.

Also - focus on just one or two carriers in each segment. Produce more volume with specific carriers and you will earn more commission.

Insurance isn't rocket science - it's sales. You need to know your product inside and out to be able to sell it.

Good luck,

Tom

 

[DJM]

ok, well i think ive got the selling and recruiting somewhat under control from my experience as a manager in a captive agency. so to make sure i understand, i can go directly to the ins carriers and want to be set up as an MGA, and once my numbers get up and going i can move up to an IMO, correct? also, what is a fair commission level for an MGA? and can you negotiate it with the ins carriers? or is it a set in stone percentage? lastly i have a friend of a friend, who owns an agency in chicago that is on a 30% commission with 8 month advance with most health carriers, and he pays his agents 20% at a 6 month advance. is this a typical set up that most people use. and what contract is he most likely under, MGA or IMO or something else? sorry for all the questions, i understand the captive side of things,but the independent side is all new to me. thanks for everyones time, i appreciate it
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i would also like to add this to the mix. i would like to train my agents well, and provide them with leads, like a captive agency does, but i guess i would have to put in their contract that they cant sell with other brokers while with me. is this a fair trade off? alot of support for loyalty?
or is it better to just give training, not give leads, and ask for no commitment? in the captive system, commissions hovered around the 20% mark, but the agent had full support and leads, although some of the leads were 2-3 year old internet leads, which were worth about as much as their weight in paper.... i know how the captive commission is set up, but what is a typical average in the independent market? i know street level is 20% and ive read that an MGA can get somewhere between 25%-30% is this accurate? some of you who offered some advice, i will be calling you either Friday or Monday.

 

[myinsurebiz]

Good luck with giving them leads and they are appointed with other carriers. Even better luck to you to figure out a contract that would dictate that AND the efforts in enforcing it.

I'm personally developing Call Centers where the agent actually comes into the Call Center to work. W2 Commissioned Employee, Benefits, etc. If they want to work with us - then they can't have any appointments except with us. If they are an existing agent - they have 60 days to try us - if they like us - they rescind their appointments - if they don't - they can haul ass . . .

On the Indy side -

I'll tell you what I started doing - I just charge for a Training Class and give my recruits access to 100% contracts and teach them where to find leads or how to create leads.

I got so tired of the moaning and groaning - so now I show them the carriers where they can sell over the phone, get 100% contracts and if they want me to teach them, I charge them $500 for a Training Program that teaches them how to sell over the phone and how to find good leads or create them.

That's the cool thing about this biz - you can adapt your marketing plan to what is working at the present moment.

Good luck,

Tom

ok, well i think ive got the selling and recruiting somewhat under control from my experience as a manager in a captive agency. so to make sure i understand, i can go directly to the ins carriers and want to be set up as an MGA, and once my numbers get up and going i can move up to an IMO, correct? also, what is a fair commission level for an MGA? and can you negotiate it with the ins carriers? or is it a set in stone percentage? lastly i have a friend of a friend, who owns an agency in chicago that is on a 30% commission with 8 month advance with most health carriers, and he pays his agents 20% at a 6 month advance. is this a typical set up that most people use. and what contract is he most likely under, MGA or IMO or something else? sorry for all the questions, i understand the captive side of things,but the independent side is all new to me. thanks for everyones time, i appreciate it
- - - - - - - - - - - - - - - - - -
i would also like to add this to the mix. i would like to train my agents well, and provide them with leads, like a captive agency does, but i guess i would have to put in their contract that they cant sell with other brokers while with me. is this a fair trade off? alot of support for loyalty?
or is it better to just give training, not give leads, and ask for no commitment? in the captive system, commissions hovered around the 20% mark, but the agent had full support and leads, although some of the leads were 2-3 year old internet leads, which were worth about as much as their weight in paper.... i know how the captive commission is set up, but what is a typical average in the independent market? i know street level is 20% and ive read that an MGA can get somewhere between 25%-30% is this accurate? some of you who offered some advice, i will be calling you either Friday or Monday.

 

[DJM]

thanks for the input

 

[DJM]

a couple more questions for you guys.

1 is it just a given that i get paid overrides on the agents i hire? or should my contract specifically state that?

2 do i need to be licensed in the state i am recruiting in? i think the answer is yes.

3 are my agents mine. say i contract with an imo, and 6 months later my agency leaves the imo, are the agents i recruited and trained at my agency mine? or do they stay with the imo and i have to start from scratch again?

4 what is the right numbers for e&o for a health and life agent? do i want 1m/1m or do i want more?