To IA's... how Much Time Do You Spend ...

[indienoise]

There are really no trends to analyze. It's hit or miss. The best advice is to diversity your book among all your carriers. If one takes a rate hike you won't be crushed financially. The're only so many hours in the day to remarket a huge slice of your book from one carrier going south. Often you don't have fair warning. You find out when you get the cancelation notice.

You mean like the carrier I was quoting on 12/30 and figured out a 1/1 effective date had a higher premium. Called the rep, he said no increases coming. Called the service center and they said they didn't know of any increases coming. On 1/6 they sent out a memo about their increase.
They're still competitive, but I can't say so much about another carrier who took rate in November. Went from the fastest growing carrier in my office to now I've gotta fight to get the 2 apps a month the rep is asking me for.

 

[GXR2]

We had a carrier artificially lower their rates far below any other carrier in our market. We were ecstatic, as one could imagine and issued like it was gold rush. They were also offering trips and prizes. We put a good chunk of premium with them in about a three year period.

They "finally" realized that rate was not profitable after they gobbled up a huge book of our business. All of sudden like a heart attack they raised double digits to get rate back to what was pretty much the standard rate in our market. Because their rates were artificially low to begin with, the clients in that huge book got broadsided with egregious double digits. Ouch!

Massive phone calls of PO'd clients ensued, threating to abandon the sinking ship - and many of them did without warning. A mad dash was attempted to stop the train wreck with outbound calls and letters to that book informing the insured we were in the process of remarketing them. It was too late, the damage was done. Lots of revenue lost that should not have been. The worst part is your agency suffers tarnished trust and reputation when that occurs.

Don't get lured into mad money and incentives. Diversify your book among all your carriers and take the prudent, stable approach to growth.

 

[insurance1822]

^its clear you aren't an agency owner. My retention with my core carriers from a premium standpoint is over 100%. If you open an agency of your own & become successful in that capacity...you will understand how wrong your post is. Mark my words. None of my core carriers play the rate game, nor would I write with them while they did. Spreading out your business is the worst thing you can do from a contingency/profit sharing standpoint. Of course, you don't even understand that part at all.

Insurance1822
1/29/16

 

[GXR2]

^its clear you aren't an agency owner. My retention with my core carriers from a premium standpoint is over 100%. If you open an agency of your own & become successful in that capacity...you will understand how wrong your post is. Mark my words. None of my core carriers play the rate game, nor would I write with them while they did. Spreading out your business is the worst thing you can do from a contingency/profit sharing standpoint. Of course, you don't even understand that part at all.

Insurance1822
1/29/16

I know a lot more than than you think I know. In fact you know a lot less than one should being at the level you are at as proven by some of your naïve posts on here.

There is only so much that aquiring talent and writing premium can do to grow an agency. If one really wants to grow its though bonuses, contingency, profit sharing and other carrier incentives. I get that.

I was speaking to the agent working for an independent agency. For an agent to survive it may not be the same strategy as the agency's.

In my previous example our agency was pushing us to write that carrier. So much so that if each agent didn't have X amount of premium per month to them our commission percentage on each agents whole book would go down. That's a lot less pay. We knew it was the incentives they were after.

Okay so when that carrier took rate and clients bailed did the CEO stop making his $400K base salary? No. But did the individual agents who had a majority of business with them see their income go from $100K to $50K. Yes. The agency suffers by but the agent who's book crumbled starves.

You don't understand this now because you may be just a two man shop so you feel the direct hit. Wait until you become a billion dollar agency and your the CEO and you'll understand. Or maybe you'll forget.

For an agent working under a independent agency they should diversify their book. I understand this may not be what the "agency" wants.

If an agent's book from the agency's "chosen" carrier goes south, is the agency going to write the agent a check to make up for their loss? No.

You "think" your carriers don't play the rate game. Got news for ya pal they all do. Some more than others.

If I was an agency owner I would have a different strategy. I'm not an agency owner yet. I'm surviving as an agent.

 

[indienoise]

I'm not completely on board with you. I get where you're coming from and understand how having to succumb to the whims of the huge agency can be harmful in the long run, I won't argue that.
However, ALL carriers don't play that game. There are some that try to buy business then end up with huge increases, sure. Others take a much more level approach. We all should expect rate hikes every year or two, so long as they're reasonable.
Great example: the carrier I have the biggest book with has been in my state for 7 years now. They came in with unbelievable rates and are STILL gobbling up market share, and I'm happy to be a part of that process. I fully expected them to have huge increases by now. But they've been really responsible in their underwriting and claims, and even though they just had an increase this month, they are still one of the most competitive carriers in their part of the market. They are outstanding in how they pay agents. And they are still profitable. They seem to be in it for the long haul.
I know all carriers aren't like that, but all of them don't play those games.

 

[insurance1822]

There's a good number of regional mutual's who certainly do not play the rate game; that's simply an objective fact that you can't argue. I have 2 regional mutual's who's rates are historically maybe 2% per year on average. They do not introduce new BOB's like the Safeco's & Travelers of the world. Not up for debate.

You were self admittedly shocked at Encompass's comp levels (which I assumed to be fairly beginner knowledge for the industry.) I don't believe there are any "billion" dollar agencies out there, in fact there aren't. Closest is Lockton & I'm sure they aren't bothering w/ personal lines. Your orders of power are way off.

If the agency's strategies, goals & compensation aren't aligned w/ their producers, that's a problem. If they have the ability to change your commissions as they see fit to steer your production in certain areas, then I think you (Again) didn't know what you were doing when you signed that contract.

Truly though, I am tired. I can't defeat the circle of life for this industry. I can only fight so many newbs on these forums before I just get tired. For those who are successful & have the X factor... it goes like this...

1.) Start as producer. Excited to be one, they think it's special, important & maybe even prestigious they got "licensed" to sell certain carriers.

2.) With tunnel vision, they start really hitting the phones & working leads (maybe even working referrals.) They see their commissions going up & they are happy. It's nice to make decent money

3.) One day....they could even see 6 figures! oh wow!

4.) They grow not only in the position, but in the industry as well. They really learn coverage's inside & out. They're really....good.

5.) They believe they have it all figured out. Hey, they do right! They come to online forums to share their knowledge & really immerse themselves w/ other insurance professionals all over the country.

6.) Then...they start to realize the other guys who owns agency's are actually pretty stupid & they're better then them. They realize, they'll never see 250k in their current setup. The start understanding personal income in a drastically different scale...

7.) The run the numbers on how much they'd make if they have had their own agency this whole time.

8.) They become ill...they realize how much they've wasted over the years. The kick themselves for not venturing off sooner. They drink vodka because Ins1822 may have been right

9.) The figure out how to open their own IA.

10.) After 5 years they're making more money then they ever thought they did.

11.) They come online & argue w/ GRXR2 & realize he needs to find his own way to the light.

GXR2 - Do what works for you. I leave you w/ this...If you're generating your own business then stop making the other guy all the money & open your own shop.

 

[GXR2]

... Then it must be the carriers we represent then. Because I've seen it happen with almost every one our agency is appointed with. For the most part now rate increases have been mild. But there have been some painful ones.

The agency I work for can and has changed the comp plan. Its evaluated on a year by year basis. Yes it stinks but that's how it is there.

If you're appointed with stable carriers that's great. I was just speaking from my experience, and what I've heard other colleague mention.

You're right the next logical step once you've been an agent for awhile is to be your own boss. Won't argue that. Being an agent/employee is a hard career for the peanuts you make. At least it is with my comp plan.

 

[Gulfman]

interesting Thread...!

 

[shawnmwalker]

Very interesting thread. I am bummed I did not see it in real time. Again, I think Ins1344 is on to something here.

 

[GXR2]

I need to seriously figure out how to get my own referral network, generate my own leads so I can break free on my own.

When I started in the business I had no idea these groups existed or I would have gone that route after the first year or two.

I'm stuck in the office most days now which sucks but can get out about 1-2 days a week.

Building a referral network. What should I focus on first?