What is the point of prospecting small accounts?

[TomsDiner982]

I am having a hard time understanding why I should be spending time trying to write business for accounts that are only going to generate less than 500 dollars of commission. They just seem like a waste of time considering I don't get a renewal on it due to all the service work involved with the account manager handling the renewal process.

At the same time, getting in front of decision makers for accounts worth 1k in revenue I have found to be more difficult. These businesses usually are usually happy with their risk management program and feel like they getting value. When this happens, I pivot to offering payroll solutions, but often times that doesn't really do anything. Even when I do get some interest, it seems like it takes months and months to get anywhere. Even 6 - 12 months before I see any sort of commission.

Is this even normal for commercial insurance? I don't understand why it takes 10 years to be successful in a career like this. I really want to get to the level where I am forming captive solutions and bringing in thousands of dollars worth of revenue for the agency but it really doesn't feel like these business owners want to work with me. It's just constant no no no.

 

[fed up]

So you land a small commercial acct and you happen to get some personal lines from the owner. Is that going to piss you off enough that you don't hang around to get his other commercial lines and multi-properties? Big accounts only work by establishing a relationship and then gathering the crops.

 

[TomsDiner982]

So you land a small commercial acct and you happen to get some personal lines from the owner. Is that going to piss you off enough that you don't hang around to get his other commercial lines and multi-properties? Big accounts only work by establishing a relationship and then gathering the crops.

It's just a ton of work for very little commission. It makes more sense to only cold call businesses with workers compensation premiums of 10k or higher... I'm not that interested in personal lines. Too transactional and based entirely on price savings, no risk management involved.

 

[rousemark]

It's just a ton of work for very little commission. It makes more sense to only cold call businesses with workers compensation premiums of 10k or higher... I'm not that interested in personal lines. Too transactional and based entirely on price savings, no risk management involved.

Large accounts were once small accounts... Don't envy the guy who seems to have tons of large accounts 10 -15 years from now while you are still butting heads with the gatekeepers.

 

[TomsDiner982]

Large accounts were once small accounts... Don't envy the guy who seems to have tons of large accounts 10 -15 years from now while you are still butting heads with the gatekeepers.

How about both.... a lot of the smaller stuff have been small for years. And since they aren't that risky and don't deal with safety and workers compensation claims, then what problem would I be solving if I were to try to talk with them? Unless you're going off pure price savings by re-writing it with another carrier, then what's the point? I don't see any value with price savings anymore. The large accounts wont necessarily care that you saved them 5k. If a prospect is only looking for price savings immediately by rewriting it with a different carrier, I'm not sure they are the right fit for my agency.

 

[fed up]

I hunted deer for years and always had a full freezer. I was usually back at camp by 9AM, warm, dry, relaxed. My friends often asked me for steaks and would ask how my freezer was full. They hunted trophy deer, I hunted and shot the first deer that walked by. My freezer was full.
Keep hunting your elephants.

 

[TomsDiner982]

I hunted deer for years and always had a full freezer. I was usually back at camp by 9AM, warm, dry, relaxed. My friends often asked me for steaks and would ask how my freezer was full. They hunted trophy deer, I hunted and shot the first deer that walked by. My freezer was full.
Keep hunting your elephants.

Depends on what you consider a large account to be.

I know people that think an account worth 10k of premium is large (1.2k of agency revenue)
Then there are others that deal with middle market where captive solutions can get into the 750k plus premium range.

What do you consider to be an "elephant" and a "deer"?

 

[AZDave]

[QUOTE=" I don't get a renewal on it due to all the service work involved with the account manager handling the renewal process."

If i didn't get any renewal for less than $500 agency commissions then the answer to your question is easy - I agree, don't waste your time. Many Indy shops have minimum premium thresholds.

My time is spent mostly with contractors. I have made plenty of mistakes over the years writing some small accounts that led to nothing but endless certificate needs for some accounts that were less than $1000/year in premium. Ugh.

But this is my agency and my decision to make. I run a lean operation, a real mom and pop store ( without the store front anymore, went to Regus concept years ago ) . If I put a $10,000 minimum account threshold in place, I would have missed out on some now big accounts. But I consider a 'big' account over $50,000. And if I can easily write a $2000 monoline GL I will. If it's Surplus Lines I will fee it.

I believe that is what is great about this business - you can pick and choose your own customer. The challenge of course is to keep your pipeline full of referrals and make the insured happy to be with you.

 

[Markthebroker]

Is this even normal for commercial insurance?

As a newbie, yes, your struggles sound typical.

I don't understand why it takes 10 years to be successful in a career like this.

Whether or not you understand it, doesn't change the fact that it's true. Your scenario is a perfect example of why it's true.

I really want to get to the level where I am forming captive solutions and bringing in thousands of dollars worth of revenue for the agency but it really doesn't feel like these business owners want to work with me.

I want to sleep with Jennifer Aniston. Neither you nor I have that status to achieve what we want.

Your first step should be to develop a niche to become an expert in. I'm 100% commercial and have been doing it for about 10 years, and I'm doing well enough I make a full time income with part time work- basically semi retired. Feel free to pm me and I can give you some pointers and answer questions.