What Are They Doing Differnetly

Sep 17, 2015

  1. nyc2phi
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    nyc2phi Guru

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    We all obviously got into this business to make money. That's probably not the sole reason for most of us but it is definitely part of it.

    I started my scratch agency two years ago as of last month and I've had great success and made more money in my first year then I did any of my years as a captive producer.

    My question is, the agency owners out there that have the highest income among all of us, what did they do differently? Did they focus on a certain niche, hire the right people, develop a system that their agency just runs like clock work?

    I'm curious to know what others think the best agencies in our industry are doing that makes them the highest earners.
     
    nyc2phi, Sep 17, 2015
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  2. Matt37
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    Matt37 Super Genius

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    usually its right TIME, right PLACE.

    The guys I know who did really super well found holes in the market somewhere and were able to fill them.. But this of course is extremely hard to do.

    For instance I know a guy who now owns an MGA who in the 1980s realized all Philadelphia taxicabs were in assigned risk and risked some of his own money and started an RRG that took off..

    Other than that .. they work harder than the others.
     
    Matt37, Sep 17, 2015
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  3. Indiana_Adam
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    I have no idea, but would love to find out as well.

    I'll take a guess that they out work their competitors(quality/productivity not necessarily more hours), provide a higher level of quality/service/knowledge than their competitors(which I'm sure most of us say we do), and probably implement systems to streamline as much of the process as possible. Hiring quality support staff(CSR, office manager, etc.) and taking on quality agents as the need arises or in expectation of growth and actually investing in them. Not throwing it against the wall and seeing what sticks.

    I believe those owners and agents getting into it now and in the last few years are in at a GREAT time. Not sure where the stat was pulled from(yes, I should look into resource before passing the information on) but something like 60% or more of the established agents/owners will be retiring over the next 5 years. That is a huge opportunity for agents/owners who are willing to bust their arses. My 2 cents, which is worth less because I have very little experience.
     
  4. nyc2phi
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    nyc2phi Guru

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    Interesting point. I do hear acquisitions is kind of the new route to take for hyper growth of an agency. I am no where near a position to look into this at this point but maybe in the future
     
    nyc2phi, Sep 17, 2015
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  5. Arnage150
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    What you did is noble. It is not easy to start a scratch agency these days. I'm sure you sacrificed a lot.
    That being said not everyone is in the same boat. I was searching for commercial real estate recently and the real estate agent said something that rang true for insurance too. When you buy a multi unit office building. For the first few years you have tenants come and go but after a while you get the stable ones that are there for a long period and it becomes easier and more profitable.
    Same goes for insurance. Agencies that have been around for 25, 50, 75 years have decades of that stable client base AND stable employee base. As a new agent you will see a lot of client and employee turn over.
    My point in this is that once you have this stable cash flow it allows you to experiment with different marketing ideas.
    I've seen agencies explode with niche programs, internet marketing, having that key company, buying out smaller agencies, hiring shark sales people, stellar service. There are many ways to do it. There is no magic growth button.
    Me personally, I wait until i see a killer product then jump on it and sell the sh*t out of it. Ride it as long as I can then jump on the next. That is the luxury of being and IA. That is where I make my "extra" money. All the while selling the normal stuff. That killer product doesn't come around as often as you would think. And never last more than a year or two. If there is one thing that is constant with insurance, it is change.

    The easiest route I would say is with great knowledge of the industry, great customer service and time.
     
  6. insurance1822
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    insurance1822 Guru

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    I've done a lot of thinking about this as I know plenty of agency owners. I believe it was timing & the time to get rich in insurance was long ago. We can all do very well...but people like us will not get rich, but we'll do well (unless of course we can buy up books.)

    Allstate agents started in Sears stores & was sold over the counter. No credit, prior claims or anything. Just rate sheets based off age etc. Eventually they spun off & handed all those agents their own books & made them very well off overnight. The internet didn't exist & insurance was bought from brick/mortar shops whereby Allstate & State Farm had the big names. Agents literally sat on their fat @sses & wrote business from walk ins. L I T E R A L L Y that's all they did

    Commercial agencies who were in existence since the dinosaurs wrote up all the business and got huge books under the same premise.

    The guys today that are Eff you rich (IMO) are because they started way before modern technology & wrote a bunch of accounts from being one of the few brick/mortar shops. I know an Allstate agent that has a $15,000,000 book because he was the only Allstate guy within 3 hours PERIOD. He's dumb as a doorknob & now just shrinks every year. But he got rich because of it.

    My SIAA master agency is nothing special. They just got into the INDY world YEARS AND YEARS ago and pretty much were the only IA writing business. I single handedly out produce their whole personal lines department, but it will take me YEARS to get to their book size.

    Why do they get to be a master SIAA agency? Answer? Because they were the oldest IA in the area who had tons of companies for years and years. Their current producer? Nothing special at all.

    I believe it's all timing. I went scratch 4 years ago & I do very well...but I'm not 'rich.' The only way to get rich now is to buy books OR be a rockstar commercial shop.
     
  7. todd02
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    The larger agents I know became huge because they found a marketing niche and capitalized on it. Also they are staffed by the best CSRs and producers whom they pay really well. It's not rocket science but it is amazingly hard to find and retain great sales people In the p&c business because the great ones become agents themselves.
     
    todd02, Sep 19, 2015
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  8. Heather
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    Does a large advertising budget have a lot to do with success. We have Indy's with entire page phone book ads, these captive guys can't seem to get enough of putting there faces on every billboard, sponsoring every event, always on the radio. I always wonder does it really pay off for them or are they doing it because state farm or allstate is paying for the advertising for them?

    I lost a potential customer a few months back said she thought we were a scam because we beat the rate she had with state farm but she never saw us on any signs and never saw us on tv, oh and we only have our name and address in the yellow pages, not a big ad. So we must be a scam.
     
    Heather, Sep 19, 2015
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  9. insurance1822
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    insurance1822 Guru

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    I spent $0 on advertising, it's ALL referral business. I do know of a Farmers Agency who apparently was the top producing agency for the entire company one of the last few months. They have like 8 locations & an insane amount of employees. I have no idea how the owners are actually netting profit at the end of the day.

    ----------

    And...I know of NO state farm agents who write any respectable amount of P&C. I'm sure they're out there, but in my market I crush them all. Yet they're on every bill board, every stupid bus stop bench etc.
     
  10. AZDave
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    I think as an IA agency owner, one must decide how large they want to become and realize that the only limitations are the ones you put on yourself. We all have the potential to put up some enormous premium volume by modeling some mid size IA shops. Commercial niche selling. Hit it and hit it hard. Find agents like yourself, train them, manage them, and turn them loose. Run that office like a pro, eat, sleep and breath it. The opportunity is there. Imagine running an agency with revenue in the millions!

    And nothing wrong with being small and mighty. I personally am at a point where I need to make a decision. To add some producers and invest, or not. I have reached a nice comfort level, and not sure I want to work that hard. The bills are paid, that agency is growing and the fish are biting.

    Decisions we make.
     
    AZDave, Sep 20, 2015
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