Starting New Independent Agency

[policyfinder]

I just passed my broker exam and want to start my own agency. I am looking to get appointed into larger carriers, and was wondering if anyone knows the job title for the decision maker involved in this.

 

[indienoise]

Welcome to the forum. You'll find a lot of helpful advice here if you stick around.

Right now, the best advice for you, whether it's what you want to hear or not, is it's not the time to look into opening your own agency. Go find an independent agent to work for over the next 3-5 years, and start considering the option again after that.

 

[policyfinder]

Go find an independent agent to work for over the next 3-5 years, and start considering the option again after that.

Thanks for the welcome. Why do you suggest this?

 

[indienoise]

It would be silly to open up a business in just about ANY field without knowing what you're doing. You don't need that pressure when you're green.

P&C is much worse, because it's not like opening a retail store or restaurant where the suppliers or wholesalers will sell their product to anybody with the money. If you don't have the experience, you're not going to get the contracts you need with carriers.

There are a hundred other similar issues, that with no experience, you don't know that you don't know. Your question you asked says it all clearly.

 

[Rknee1]

Additionally, what type of marketing are you going to be doing to bring in business after you're warm market has dried up.

Mailers, purchasing leads and print advertising are expensive. Do you have enough savings to pay your current bills for at a minimum of 6 months.

I work for a captive agent at the moment in Illinois. I am hoping to eventually to open my own independent agency, but the costs involved in opening a P&C agency and running and agency (INDY or Captive) are high and the failure rate is staggering.

If you have the funds and can buy a book of business from an INDY - then you must make sure you can keep the carriers he has contracted with before signing on the dotted line

.....and then setting up an agreement for the Agent to stay on while you learn the ropes - then have him call his book of business and introducing you to his entire book

..and then making sure you get a non-compete agreement from the Agent - so he does not take his old clients with him for a minimum of 2 years

....not to mention E&O insurance, cost of keeping your office up and running, costs for phones, internet, payroll, electric, water, etc.

....do you have a business plan set up, can you do your own accounting work for tax purposes, have you met all the requirements that the State you are in requires - Broker Bond for example, are you going to be an LLC, a sole proprietorship, a Corp, etc...

....and several dozen more items that will rear up their ugly heads ready to bite you in the arse.

If you have the funds, willing to put in the hours (not a 40 hour work week - for a new agent) like 70 hours a week plus for the first 2 to 3 years - then go for it.

If you prefer captive and are willing to go scratch - depending on which captive company you deal with can cost over 50K just to purchase a scratch agency then you will need probably a minimum of another 50k to survive the first year.

Please read through the forums to learn the steps to open an Agency, read on the pitfalls and the benefits before leaping into ownership. Find someone to mentor you....someone who is successful and will tell you the truth..

Good Luck