I met my friend through our mutual M.B.A. program and have known him for almost two years now. We both have a good business sense, and after discovering that he and I are very complementary, we are looking to jump industries and start our own gig sometime in 2014 -- possibly in P&C. Our central base would be Connecticut.
Before I go further, let me draw a picture for everyone.
Me
My Friend
I realize the downside is that performance is more dependent on how that company underwriting is doing (e.g. if UW stinks for the year, so will the production).
2. Candidly, I'd love if he and I were able to do this on an Independent basis. However, I get a feeling we'd fall flat on our faces due to lack of clout and knowledge (since neither of us come from a P&C background). Also, appointment would be difficult since, again, we lack a formal book of business. Are we crazy?
3. Ideally, he and I would setup a FTIN for our agency and have all Agent Compensation routed into the agency. The agency would then pay us an equal % as takehome, and a remaining % would remain as business funds. The business funds would theoretically build upon itself over time.
Of course, he and I would get a legal contract that clearly indicates this arrangement. Is this smart?
For what it's worth, my employer right now does the "you get what you kill" approach with the business owners.
4. How much servicing is there on the P&C side? And how much would this eat into cold calling time?
I know questions and claim issues ALWAYS come up on the L&H side, and servicing is how I am able to differentiate myself now (e.g. reconciling people's medical bills, calling hospitals and insurance companies about pre-authorizations at 8pm, etc.).
5. Are renewals handled by the Agent or is it handled by the Insurance Carrier? I can't imagine small P&C shops juggling both new business and renewal quotations simultaneously -- especially since one could have hundreds or thousands of renewals revolving all at one time.
6. Are we shooting for the stars if our agency were to do BOTH L&H and P&C simultaneously? Doing so would allow my health insurance knowledge and our combined Life knowledge to supplement our P&C knowledge.
7. Has anyone tried doing P&C out of their own homes? That would help cut down on expenses, but I do realize it also eliminates street visibility.
8. Am I correct to understand that commercial lines is where the money is at? If so, why does it seem like many P&C shops operate on a street-front basis (catering towards personal lines and walk-ins)?
9. If we setup shop in one town/city, what is the likelihood of garnering business outside of that greater metro area? For example, are business opportunities limited to your immediate geographical area?
I ask because my L&H boutique agency spans the whole NY/New England area.
10. For us 20-somethings, is getting into P&C even a good idea? Or should we look elsewhere and/or stick with working for a formal company? I know Health is tumultuous right now with Obamacare, so I'd like to figure out my career before it is too late.
Any helpful tips or advice would absolutely be welcome!
P.S. Kudos to Chevarian113 and NCagent for the wonderful "guides" for new P&C agents and agencies.
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Quick addendum: I am quite skilled in the world of graphic design, and helped to "transform and revamp" my current boutique agency with their own marketing materials. Brouchures and collateral were typed up in Times New Roman, 12 font in MS Word when I came here. Mostly everything is now made through Publisher, InDesign, etc. and I receive compliments all of the time.
I am also a "go-to" person in the office when it comes to writing RFP's, cold e-mails, or anything related to the English language. Thus, I'd like to think that I have strong writing and communicating abilities, along with a good insight on what appeals to people from a marketing perspective.
I mention this because I realize any new start-up venture will heavily focus on marketing to prospective clientele. Eeek!
Before I go further, let me draw a picture for everyone.
Me
- I currently work in an Account Management role for a small L&H boutique agency that specializes only in Group Employee benefits. Clients PRAISE my customer service and promptness.
- My takehome is about $60k-$80k/year variable (mostly salary). I am in my late-20's have been in the Employee Benefits sector for 6+ years.
- I don't do much cold calling, but have brought in a few clients of my own through networking and am very, very, very good with people. During my younger teen years, I was the most salesperson at an electronics store, and thus, I know the basics to closing a sale.
- I am known in the office to be very cerebral, and have strong industry knowledge of Group Health, Dental, Life, Disability and Accident/Illness.
- I am also known to be a "grinder" - staying as late as 10pm sometimes to get things done.
- I know very little about P&C, and realize it is a totally different ballgame.
My Friend
- He works for a credit union handling asset/portfolio management, sells personal Life Insurance, and does a lot of sales presentations and seminars.
- He is in his mid-20's and has been doing this for 3+ years now. He makes around $40k/year variable.
- Admittingly, he is a better "sales" guy than I am. However, he is less cerebral -- hence the complementary skills.
- He does have cold calling experience.
I realize the downside is that performance is more dependent on how that company underwriting is doing (e.g. if UW stinks for the year, so will the production).
2. Candidly, I'd love if he and I were able to do this on an Independent basis. However, I get a feeling we'd fall flat on our faces due to lack of clout and knowledge (since neither of us come from a P&C background). Also, appointment would be difficult since, again, we lack a formal book of business. Are we crazy?
3. Ideally, he and I would setup a FTIN for our agency and have all Agent Compensation routed into the agency. The agency would then pay us an equal % as takehome, and a remaining % would remain as business funds. The business funds would theoretically build upon itself over time.
Of course, he and I would get a legal contract that clearly indicates this arrangement. Is this smart?
For what it's worth, my employer right now does the "you get what you kill" approach with the business owners.
4. How much servicing is there on the P&C side? And how much would this eat into cold calling time?
I know questions and claim issues ALWAYS come up on the L&H side, and servicing is how I am able to differentiate myself now (e.g. reconciling people's medical bills, calling hospitals and insurance companies about pre-authorizations at 8pm, etc.).
5. Are renewals handled by the Agent or is it handled by the Insurance Carrier? I can't imagine small P&C shops juggling both new business and renewal quotations simultaneously -- especially since one could have hundreds or thousands of renewals revolving all at one time.
6. Are we shooting for the stars if our agency were to do BOTH L&H and P&C simultaneously? Doing so would allow my health insurance knowledge and our combined Life knowledge to supplement our P&C knowledge.
7. Has anyone tried doing P&C out of their own homes? That would help cut down on expenses, but I do realize it also eliminates street visibility.
8. Am I correct to understand that commercial lines is where the money is at? If so, why does it seem like many P&C shops operate on a street-front basis (catering towards personal lines and walk-ins)?
9. If we setup shop in one town/city, what is the likelihood of garnering business outside of that greater metro area? For example, are business opportunities limited to your immediate geographical area?
I ask because my L&H boutique agency spans the whole NY/New England area.
10. For us 20-somethings, is getting into P&C even a good idea? Or should we look elsewhere and/or stick with working for a formal company? I know Health is tumultuous right now with Obamacare, so I'd like to figure out my career before it is too late.
Any helpful tips or advice would absolutely be welcome!
P.S. Kudos to Chevarian113 and NCagent for the wonderful "guides" for new P&C agents and agencies.
- - - - - - - - - - - - - - - - - -
Quick addendum: I am quite skilled in the world of graphic design, and helped to "transform and revamp" my current boutique agency with their own marketing materials. Brouchures and collateral were typed up in Times New Roman, 12 font in MS Word when I came here. Mostly everything is now made through Publisher, InDesign, etc. and I receive compliments all of the time.
I am also a "go-to" person in the office when it comes to writing RFP's, cold e-mails, or anything related to the English language. Thus, I'd like to think that I have strong writing and communicating abilities, along with a good insight on what appeals to people from a marketing perspective.
I mention this because I realize any new start-up venture will heavily focus on marketing to prospective clientele. Eeek!
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