Starting New Agency

[houstins]

Hey everyone,
I passed my P&C exam in TX on first try about 3 months ago. I am very excited about the insurance industry and willing to learn as much as I can. I started working for an independent agent having access to several companies and wrote many homeowners, auto and commercial (average 2 of each per day).

So I got a lot of practice and experience in the tools and systems and dealing with customers in terms of servicing clients over the phone and cold calling so forth. It was aggressive training, after that I went with a captive agent and went through all the workshops and got binding authority.

I feel very confident in my skills, I had my own retail business, have a BBA, worked in sales for 4 years, and I'm very tech savvy and a very fast learner.

I have a good network in place to get me business, in all lines home, auto and commercial.

I am trying to start my own agency and had a few questions (sorry for the long intro) I have about $35000 start up capital.

1. Which company will be willing to offer E&O to a new agent like myself in Texas and at what average cost?
2. I know there are arguments for and against going captive or independent, but if I take the independent route which companies will be willing to appoint a new agent, safeco, progressive, travelers, geico, aetna (im going to get my life and health license soon)... so forth
3. If I take the captive route, I would prefer Allstate, how hard is it to get appointed by them? For capital requirements I can show more than my start up capital.

Any help would be greatly appreciated, once again I apologize for the lengthy post just trying to provide as much information as I can.

Thank you for your time,
-Jay

 

[xrac]

Copied from an email I received:

I am a former Allstate agent and a current GA in Texas. If you need help or appoitments call me at 281-398-1010, OpenDNS texas.com

Thanks,

Frank Hursh
Texas Insurance Agency

 

[FLInsa]

It appears you've made some good progress, however $35,000 is NOT enough to start your own agency. Consider the following:

1. You will need no less than $15,000 set aside JUST for marketing.

2. You will need a management software. Depending which one you settle for, those can cost upwards to $5,000 - $6,000 initial setup fees alone.

3. Then there is the rent, utilities, computers, etc.....

4. Don't forget the "survive" money you will need to have until the agency is making a profit. In other words, how are you going to pay your bills, eat, drive, etc..... Personally I would set aside at LEAST 6 months worth of "survival" money.

Not trying to discourage you, however I started my independent agency last year and am doing very well now, but in the beginning things were tough.

And last piece of friendly advice, if you are looking to truly be your own boss, independent is the way.

G/L

 

[Andle]

Currently being an Allstate agent and having no independent experience I would go independent. I am not in TX but Allstate's current rates on the west coast are terrifying. A minimum of $50,000 is required for Allstate. Before making a decision contact a few local Allstate agents and ask them about the current state of the company, rates, products, etc. Im sure someone will give you the truth.

 

[houstins]

Hey guys thanks for all the excellent advice, I apologize for the late reply I was out of town.

Thanks for the info xrac I will try to contact him.

FLInsa:
The thing I was scared about going with independent was that I would not be able to get appointed by a lot of companies given my lack of experience. In a sense I would be losing out on alot of business.As for the survival money, I have that set aside besides the investment that I said above. Also, I have the management software part covered I have an IT partner that will take care of that part for me. And you are not discouraging me I appreciate your honest input

Andle:
Does it take 50,000 to start an Allstate agency or do they require you to have that much in your bank but the actual investment is a little lower ? Furthermore, I have been in touch with an Allstate agent and he gets very very good rates comparatively to other companies here in Texas.

thank you again for all your time

 

[workingsmart]

Hey Houstins,


You should look into Security Insurance. They can provide you immediate access and quoting to top rated carriers. Thats who I am with and they are awsome. Check them out at secins dot com. They provide you with a lot of training and support

They are easy to use and pay some of the high commissions I am aware of. They also offer profit sharing

 

[1manshow]

Personally, I would try the TX ins. dept first and see if they can provide you with a list of companies and their respective market share% in your county/area. Then you might have a better snapshot of who the players really are. If Allstate is a player in TX I'd bet they'll give you more support as a "start up" than any company that you'd get as an IA. Up here in Pa Allstate isn't great but right across the line in NY they have super competitive rates.

FYI: We have carriers run several dozen/hundred rate comparisons before we consider bringing them into our agency. If they're not competitive it just doesn't make sense for either of us.