Success Stories- Building an Independent Agency

[isgutah]

I am interested to hear the stories of those who have started independent agencies from scratch, and what was the tipping point from going from good to great?

I own a small commercial lines agency, it is going well, we are growing quickly. I am curious about benchmarks other agency owners have used to hire staff and producer. Let me know your story.

Thanks

 

[infoe]

I think Bertolinoins would amongst agency owners on the forum that could give you the best answer in this very department. He has a model that I'd like to emulate, and with 3 agency locations within a few years time frame, he's doing things right.

I know he uses a consultant, has a hefty price tag on a monthly basis but must definately be worth it and I plan to go the same route.

How long have you had your agency for? Just commercial lines? No personal lines or life and health pivotting? Are you a part of a cluster?

I'd like to know about this as well as I'm starting scratch in S Florida. (puke) but I'm going to be successful. There's no alternative for me, and I don't just want to be good, I want to be great. So thanks for the question,

 

[isgutah]

I started my agency July 09, it has really been a great decision for me. I am not part of a cluster, and I do write a some small group health. Personal lines are pretty limited, I have started doing a lot more now that I have some carriers that allow me to utilize their service centers.

 

[infoe]

what type of location did you start off with? retail front? office space? I'm trying to sublease from a realtor/brokerage to start off as taken advice from here previously but it's been tough to find open space.

How many employees sub agents are you at now?

 

[isgutah]

I have 2 csr's both licensed and do a small amount of selling and I have one apointment setter. I started out in a small office with low rent, I have moved to a little bit bigger of an office space to accommodate more people. I think retail space is next to useless in our industry.

Hiring a producer has been a challenge. I had one, he was just not cut out for insurance, so we parted ways. I have had trouble coming up with a compensation plan that makes sense to me, but is also attractive to producers.

 

[Bertolinoins]

Started from scratch in June of 2008 after working as a commercial producer for a large regional agency for 5.5 years. Did my homework on the front end and went with a cluster from the start as I needed the market access I was used to and I knew contingent commission is where a good percentage of the owners profit is. I spent the first 7 months selling and servicing my own accounts. I did nothing but prospect to property managers, real estate agents, CPA's and payroll reps. I was at an executive office suite where I ran into a personal lines agent that was a one man shop looking to retire so I bought him out as earned over 24 months. That revenue let me hire a telemarketer and move into a bigger office. One of my former competitors was unhappy at his old agency and joined me as a producer. At that point we had enough volume to support a full time account manager so we could sell full time. I came across two producers working for a direct writer that had been uncompetitive and tweaked their compensation package enough to piss them off. Both came over and have done well. I ran monster and craigslist ads for agents and had a few guys flame out... I couldn't afford a draw and they couldn't crank things up fast enough so they ended up finding salaried jobs elsewhere. I did find a female agent while betworking at the local association of Realtors that was a title officer and had a ton of contacts but was struggling with Liberty Mutual because they are picky and not very competitive in our area. She jumped on board and has averaged 30 HO policies a month for almost a year and she has been cross selling about 40% of them on the first shot.

I started networking at IBA West and PIA events trying to meet older agents that were mom and pop shops. Found two that were ready to retire and we worked out deals for a 3 year buyout with them producing part time and helping me transition the renewals. I now have one in the works for 1/1 with a slightly larger agency that will bring me to $7m in premium in 4+
years. I am moving into a new 2400 sq foot office with room for 15 on 2/1/2012.


My best advice on building an agency is to hire a good appointment setter and network with other agents. Tell your marketing reps that you are looking to grow and if there are any agents nearing retirement age without a perpetuation plan or if there are any good agents that don't seem happy with their current situation. When you get depressed or discouraged... get out of the office for a minute to clear your head and then get right back in there and keep working your prospects and lead sources. A lot of my former clients wouldn't leave the big agency I was at for a one man shop but now they are coming over. You just have to keep grinding. The answer to every problem you can encounter as an agency owner is to generate more revenue.

 

[iiinycboi]

Bertolinoins, you have just become my idol. I am trying to get to your level of success and starting from scratch. I feel the ny market is way to price competitive and price oriented. They only care about price and it's reach so low that they just stick to their current policy. I'm talking like 500 a year policies on homes!

Maybe I should go strictly commercial, at least there's room to negoitiate an explain better/right coverage.

 

[Bertolinoins]

Bertolinoins, you have just become my idol. I am trying to get to your level of success and starting from scratch. I feel the ny market is way to price competitive and price oriented. They only care about price and it's reach so low that they just stick to their current policy. I'm talking like 500 a year policies on homes!

Maybe I should go strictly commercial, at least there's room to negoitiate an explain better/right coverage.

Work twice as hard and do both. Commercial from 9-5 and personal lines from 5-7pm and 9-noon on Saturday. In the long run you will appreciate the stability a base of PL accounts provide.

 

[iiinycboi]

I currently work 6 days a week. I am a one man show atm so i dont know if should leave my office to do CL cold canvasing or do direct mail with my xdates for PL. i used to do 7 days a week but i just got overwhelmed and needed one day to myself.

 

[isgutah]

Generating more revenue is key, I say get out of the office and sell. Hire a part time csr if you need to, I have found that I plateaued for a while when I tried to do it all myself.

As far as getting producers, I can't afford to pay a draw right now. With all of the non-compete agreements used around here it makes it difficult to attract talent from other agencies.

I like the idea of getting to know other agency owners to look for acquisition opportunities.