Texas Insurance Rate Increases UW Changes
- Thread starter todd02
- Start date
- 1,581
...and it begins. If they're anything like Allstate (which they are..) they'll not only increase rates but reduce existing discounts on top of it (so they can get around the DOI branding it a *rate* increase..) and change tiering. Here's the recipe..
1.) Captive buys up business w/ artificially low rates
2.) Captive starts hammering people at renewal
3.) Captive agent has no other options, so they do their best to talk customers into staying despite massive rate increases.
4.) Captive carrier comes out w/ unrealistic sales goals considering the ridiculous rate increases essentially making bonus all but unattainable
5.) Captive may also insert customer satisfaction into your compensation in lieu of the massive rate increases. For example it goes like this: Hammer policyholder w/ 50% rate increase, have client call agent who can't do anything about it, send survey to client asking how likely they are to refer that agent (who just *did nothing* to help their rate increase) & then hold results against you
6.) Suddenly the captive agent's income (that's grown over the last 3 years..) stops accelerating. Retention takes a $hit because of rate increases & new business is harder to write b/c of the new garbage rates. Your tax return won't lie..
7.) Your referral sources are like "uhh dude what the hell? I referred you these people & their rates have doubled?"
8.) Captive agent starts realizing that maybe the Insurance1822 guy may have been right. Maybe the captive channel ISN'T the best route? However, you're 3-5 years into the game & now accustomed to a lifestyle & income level that makes it almost impossible to walk away from.
9.) You've been doing this long enough to realize the constant prospecting & mass mailers to churn up business (especially when rates aren't hot..) doesn't perpetuate an enjoyable run in this business.
10.) You're now stressed. You're spending hour after hour, day after day talking people off ledges when you want to be writing new business. Your producers/staff are doing the same thing so of course sales are going to suffer. Despite this, maybe you make a decision to hire another staff member to assist w/ the changing environment. If you're one of the moron agents who relies on their bonus to stay in business...well...you may be going out of business after 2 of these years.
Understand this ALL OF YOU WHO EVER QUESTION THE CAPTIVE ROUTE. This is textbook. How your income grew years 1-3 is how it should always grow BUT IT WILL NOT CONTINUE if you're enslaved to one carrier.
Maybe Todd02 will still thrive, maybe not? But it's this exact environment that certainly isn't stacking the deck in the agency owner's favor. It's an environment that's making Farmer's rich
1.) Captive buys up business w/ artificially low rates
2.) Captive starts hammering people at renewal
3.) Captive agent has no other options, so they do their best to talk customers into staying despite massive rate increases.
4.) Captive carrier comes out w/ unrealistic sales goals considering the ridiculous rate increases essentially making bonus all but unattainable
5.) Captive may also insert customer satisfaction into your compensation in lieu of the massive rate increases. For example it goes like this: Hammer policyholder w/ 50% rate increase, have client call agent who can't do anything about it, send survey to client asking how likely they are to refer that agent (who just *did nothing* to help their rate increase) & then hold results against you
6.) Suddenly the captive agent's income (that's grown over the last 3 years..) stops accelerating. Retention takes a $hit because of rate increases & new business is harder to write b/c of the new garbage rates. Your tax return won't lie..
7.) Your referral sources are like "uhh dude what the hell? I referred you these people & their rates have doubled?"
8.) Captive agent starts realizing that maybe the Insurance1822 guy may have been right. Maybe the captive channel ISN'T the best route? However, you're 3-5 years into the game & now accustomed to a lifestyle & income level that makes it almost impossible to walk away from.
9.) You've been doing this long enough to realize the constant prospecting & mass mailers to churn up business (especially when rates aren't hot..) doesn't perpetuate an enjoyable run in this business.
10.) You're now stressed. You're spending hour after hour, day after day talking people off ledges when you want to be writing new business. Your producers/staff are doing the same thing so of course sales are going to suffer. Despite this, maybe you make a decision to hire another staff member to assist w/ the changing environment. If you're one of the moron agents who relies on their bonus to stay in business...well...you may be going out of business after 2 of these years.
Understand this ALL OF YOU WHO EVER QUESTION THE CAPTIVE ROUTE. This is textbook. How your income grew years 1-3 is how it should always grow BUT IT WILL NOT CONTINUE if you're enslaved to one carrier.
Maybe Todd02 will still thrive, maybe not? But it's this exact environment that certainly isn't stacking the deck in the agency owner's favor. It's an environment that's making Farmer's rich
- 134
Well said, 1822.
- Thread starter
- #4
Andle
Expert
Its a 5-6 year cycle. If you are lucky the captive company might give you chunks of premium that other agents leave behind. You can then service them and earn a decreased commission. More headache.
- Thread starter
- #7
YUP! In 2010 I was gifted 500 policies because Agents quit in one of our hardest markets ever.. I think this will happen again.
- 1,581
At the reduced commissions they're paying on those policies & the increased burden of service its most like not a great gift
- Thread starter
- #9
After 2 years full commission. So it's a great deal.
Really no other Texas agents on this site? This site use to have tons of posts. Is there another forum with more traffic?
tpowell138
Expert
- 48
Ha agree i now check this forum about once a week. Still the same ego's running the very few post a month.
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