Taking Over State Farm Agency

Discussion in 'General Insurance Agent Discussions' started by Needadvice, Sep 7, 2017.

  1. Needadvice
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    Needadvice New Member

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    Hi Everyone,

    I have the opportunity to take over an existing State Farm Agency. What questions or performance metrics should I make sure to cover during my evaluation?

    Thanks All
     
  2. VolAgent
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    VolAgent Guru

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    Start with how much of the book will you be allowed to keep.

    State Farm agencies cannot be sold. They go back to the mothership, which usually breaks it into smaller books to seed new agencies.
     
  3. Needadvice
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    Needadvice New Member

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    The recruiter just said that I would get all residuals of Agency and that it is a large book.
     
  4. VolAgent
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    Get in writing how much you will get. Not that it really matters, but it will help you find out just how honest the recruiter is.

    Whatever they give you, they will set your goals to be a stretch.

    When buying a book you typically want to know the mix of business, PL vs CL, standard vs non, monoline vs package, etc. Also what the revenue is, expenses, and how long they have been a client.

    With State Farm, it doesn't matter so much since they are concerned about growth and hitting their bonuses. You can't just take over an agency and milk it for income. You will have to grow and hit the production mix they want to get your bonuses, otherwise you will be bleeding money.
     
  5. Needadvice
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    Needadvice New Member

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    Thank you. Do you feel State Farm is not the best company to sell for? Should I look for an independent instead?
     
  6. VolAgent
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    My issue here would not be with the company as an insurance company, but the company and their recruitment methods.

    Based upon what I have seen on here, State Farm sets people up to fail, despite what they say and what they intend.

    State Farm has a great name, and they can be competitive in certain areas. But then there are times they aren't competitive too.

    Also, you have to learn insurance somewhere, so unless you find an independent willing to train you, working for State Farm to cut your teeth is not a bad idea.
     
  7. Chazm
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    Chazm Guru

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    You can't just take over a State Farm. You will go through rigorous training with them and you will have produce tons of projections, demographics, etc.
    All the numbers you are looking for you will have to research.

    My good friend took one over last year because an agent passed. They split his biz in 2 and he opened a new location.
    He works very hard and expected to break even the first two years. Year one he broke even and this year he is expecting to profit 100k. But he is number 2 or 3 new agent in the southeast. The other new agent is struggling.

    I believe you can't just buy their BOB either because you never really own it. So if a recruiter is talking to you, someone must be retiring. But you still have to apply for a location that becomes available and SF picks who gets that location.

    How long have you been in the biz?
     
  8. Needadvice
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    Needadvice New Member

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    I would be new to the industry and have to go through the training process, but had had success in business development for 10 years.

    100k doesn't seem too high to be one of the top producers in a region.

    Does you friend feel that State Farm was honest with them upfront on the challenges of the role and opportunity? I have read some forums that they are not completely honest.
     
  9. Needadvice
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    Needadvice New Member

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    I would new to biz. The recruiter today sure painted a rosy picture, almost too good to be true. It's a $1.3M book. $100k profit doesn't seem that high for such a top performer. I make around that in my current job.
     
  10. Tehguy
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    Tehguy New Member

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    I just went through this.
    I was contacted by SF via LinkedIn. Told they had an agency opening near me. Told me the book was big and profitable. Said it didn't matter I never sold insurance, I had applicable skills on my resume. Had to pass the two stupid corporate tests. Put together a business plan. (Free marketing analysis for SF) They told me I had to get P&C and L&H before I could go further. Got those (at my expense). All the time getting the "Rah Rah" treatment.
    I apply to the site, get an interview in 2 days. Go to the interview. Told not to worry, I've impressed everyone. After the interview, told I did great. Next day, told "sorry we went with someone internal and you didn't come off as understanding what it takes to be a SF agent." Then it was suggested I go work in a SF branch to cut my teeth (bait and switch). Sorry but I just put a whole business proposal showing how little the branch people make compared the Agency Owner, why would I do that?
    When you "take over" an agency, they divide the book up so you can't coast and are forced to grow the business. According to the compensation calculator some sites take 2-3 years before you're making any real money.
     
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