Weaknesses in Captive Companies

Jan 22, 2016

  1. g717
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    g717 New Member

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    First off I love this place! This website has honestly helped me a ton and I come here when I need some help.

    I want to know the weak spots of State Farm, Allstate, Farmers, American Family Country Financial and Farm Bureau.

    The reason is because I'm planning on shooting an email to them asking them how I can help the clients they are not capable of doing.

    Just a question for some of those who possibly worked at State Farm or something?

    Thanks for your input!

    Good Selling.
     
    g717, Jan 22, 2016
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  2. agentinsouth
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    agentinsouth Guru

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    Non-standard auto is your in w/ the agents. I have NO desire to play in that market. However, I have friends who make a good living playing in the non-standard auto markets from SF referrals.
     
  3. indienoise
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    indienoise Guru

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    I was with Nationwide for a couple of years. Their brokerage is pretty complete, so there's not a lot of gaps in what they have a market for, unless you're dealing with a newer agent who doesn't have all the market access or interested in selling outside products yet.
    The weakness in Nationwides auto is lapse in coverage. NICOA/NAICOA does not allow even a one day lapse. It's kind of the single variable that defines an insured as either standard or nonstandard (besides loss/violation history, of course) but now that I'm an IA I've learned all standard/preferred carriers don't operate that way. Might be able to capitalize on that little weakness.
     
  4. Mireagency
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    Mireagency New Member

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    Agentinsouth... thanks for the info
     
  5. AZDave
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    AZDave Guru

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    As already mentioned, non standard business is what you will get from captives.

    I was captive amfam for 22 years. Had a relationship with an IA and would send them some real winners - all hi risk auto and home referrals. When I went Indy, I hit up my captive friends, and received referrals - all crap. Some real oddball stuff. Not wanting to piss off the referral source, I would spend a lot of time, spinning my wheels trying to place it.

    Good Luck and Good Selling!
     
    AZDave, Jan 23, 2016
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  6. djs
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    djs Super Moderator Moderator

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    Captives tend to have a pretty decent appetite for personal lines stuff, except, as others pointed out, the high loss ratio / non-standard stuff that most agents don't want. An agent can do well focusing in that market, but its usually a high service type of market.

    Captives tend to have a much more limited appetite in commercial. Most don't do anything big but at the same time, they frequently excel at restaurants, hair salons, small mom and pop stores.

    My strong advice isn't to try to fill all of the little gaps a captive guy might have, but to try to excel at a few things and be the go to guy for those things. I know one agent who became the expert at insuring bowling alleys. A lot of agents focus on aviation. Some in bars.

    Keep in mind any personal lines agent that has a frequent need for a market they can't fill has probably come up with a way to fill that need. No agent does it all. Find your niche and run with it. You will have to do some of your own marketing though.

    Dan
     
    djs, Jan 23, 2016
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  7. ModernInsurance
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    ModernInsurance Super Genius

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    I can speak intelligently on Allstate, having previously worked for an agent in Delaware.

    As of mid-2015, Allstate suspended its indemnity (nonstandard) line of business. The agents have no choice but to farm this out now. No telling when it may be opened back up.

    Allstate also tightened underwriting guidelines. A single car auto policy will only be written if the driver has 1 incident or less (with not-at-fault accidents counting as an incident). 2 not-at-faults? Too bad.

    I think right now this is the SINGLE biggest opportunity as these prospects with 2 "incidents" wouldn't be considered nonstandard/high risk by most carriers.
     
  8. LGilmore
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    LGilmore Guru

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    Do you mean contacting corporate or just local agents? Corporate will say thank you but no. Your best bet is connecting with local agents and developing relationships. That might require you to send business their way too. I mean it is great to think you can collect all the business they can't do but honestly, do you expect to do it for free?

    Referrals usually require some give and take with fellow agents. You're not really helping the agent out unless somehow you're giving the agent some of the commission.
     
    LGilmore, Jan 27, 2016
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  9. mattupthehill
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    mattupthehill Expert

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    A lot of agents have a "relationship" with a broker ( IE. a family member,spouse) So many won't respond.
    Captives also get a lot of emails from IA's like yourself. Your best bet is to stop by ( call and make an appt.) and talk with the agent. That way he can see you face to face. Tell them what you do and how you can help his clients. Maybe bring some coffee and donuts. Just a thought.

    Also had a bad experience with an IA for a commercial risk, long story short. He took the referred business and everything else. Last thing he ever got from us, short-sighted and foolish.
     
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