What would you do only 90 days after you started a captive?

Jul 3, 2019

  1. Mulligans Travels

    Mulligans Travels New Member

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    Hello all,
    I'm new to the forum and acknowledge I should have registered sooner and made different decisions sooner but I've finally set up my account to ask my question and appreciate any feedback short of unhelpful criticism.

    Unfortunately, I trusted more than I should have and was over promised with under delivery of support so I terminated my captive contract just 90 days in from setting up a P&C agency with leased space and systems. My question is, what would you do only 90 days after you started a captive once you had invested all the expense in setting up?
    (Until all is sorted out I'm keeping the name out of the thread but you can PM me for it)

    I admit recruiting was significantly more challenging than described or expected largely because most candidates struggle with licensing and the average time was almost 3 months to binding authority.

    But the significant factors beyond staff that skewed the cash flow projections were rates described as competitive but were instead extremely selective, market closing percentages that neither I nor any of my peers I trained with were hitting half of, and lack of support that was committed but not delivered.

    I also admit I had to weave my way through a variety of lead vendors and the recurring billing tactics to start finding ones that provided any results. The reality is I was the only one writing anything while I was trying to recruit enough staff to hit the model but the staff I had wasn't able to compete on the quotes they were making. I did consultative training with them but I saw for myself rates as much as twice what the prospect was paying on a home or auto when they were the target profile.

    So I now have a space, phones, equipment, systems, etc and therefore either just a lot of bills or nearly all the infrastructure of an agency. I was verbally told I won't have to honor a non compete in the space but will wait for that in writing obviously. If any of you with much more wisdom than me in this industry were in my shoes, what would you do with that situation?

    A quick about me: I'm in Ohio. I am new to P&C but I've been in different industries of sales for about 20 years, the majority of which is in commercial payments which I still have a small book of business in. I've got multiple licenses but am looking for a way to leverage the P&C for any ROI at all for this investment already made and would consider writing from my home office but my understanding is that isn't the norm.

    Thanks for reading, for your consideration, and for any words of wisdom!
  2. Warrior

    Warrior Super Genius

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    Ben Griffioen 567-336-0823
    He is with FireFly who is an aggregator who can get you set up with several top companies to write through. They are a really affordable aggregator with a strong financial backing.

    BTW, stop wasting buying leads from lead stores. They are not helping you financially. Start getting out into the community and meet people face to face. Farmers Markets, Home Shows etc. Go there as a visitor, not have a table. There are better ways to get leads than buying them from a vender who sells them to you for $$$ and every other agent has the same leads. Get into referral partners.
    Warrior, Jul 3, 2019


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    Hello @Mulligans Travels, I agree with @Warrior except you should check MANY aggregators and clusters out. Being transparent, I myself founded, own, and operate one but let's focus on your situation, not us... Here is a list of questions to ask ANY potential partner network. Wish you well in your journey!

    - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

    First, you have made a GREAT decision to go independent! Being at a captive agency works well for some, but if you made it this far, you are at least curious how the "other ones" do on the indy side of things. There's a great deal more freedom, but it doesn't come without a share of burdens as well. This is big business and a lot of hard work is in your future if you plan on being successful. Being a part of an agency network can be a great way to ease some of those bumps and bruises you are sure to get when starting your own independent agency, but bear in mind... There is no magic bullet to make it all come easy. No network will ever be able to sell your policies for you, you need skills, luck, and a great partner. That said, let's get past all the doom and gloom and get to it! Here are just a few of the factors to consider and questions you absolutely need to ask when interviewing a potential agency network/cluster/aggregator partner.

    1. Do you have a good carrier mix across the lines of business I want to use in my agency?

    2. Are those carriers competitive in my region?

    3. Do you have any production requirements?

    4. Do you provide an agency management system?

    5. Do you provide a comparative rater(s)?

    6. Do you have a non-compete or non-solicitation if I decide your network isn't for me? If so... why?

    7. Do you have any exit fees?

    8. Can I sell my agency at some point?

    9. If I sell my agency, do you take a cut?

    10. HOW do I access the carriers... do I submit everything to you, or do I get DIRECT access to the carrier?

    11. How long is my contract for, and do I get ownership right away, or over time?

    12. What are the startup fees and are you willing to work with me if I need to make payments?

    13. What is the commission rate?

    14. What share do I get of the contingency bonuses (If any)?

    15. What is the criteria to participation the contingency bonuses (if applicable)?

    16. Do you offer guidance and training during the startup phase of my agency and a spirit of mentorship throughout the relationship?

    17. Are you open to me contacting some of your member agencies before I sign the contract?

    18. May I have an attorney, or third-party consultant review my contract with me?

    19. How much industry experience does your network leadership have?

    20. I think the MOST important thing someone can do other than reading the contracts of many networks is speak to the owner/CEO/president of each network to get a feel for the culture. Let's face it, some people you like the minute you meet them, and then there are others that make your skin crawl... If you find they don’t have the time to talk to you... message me your contact info and I will.

    One thing to note... This is just as much an interview of you to be a good fit for a prospective agency network. No network wants to be the quick unthought-through decision and asking these questions will strengthen the relationship with your chosen group. There are subtle nuances each network option will bring to the table and each will stress some areas over others. At the end of these questions though as you are reviewing each of them carefully, I hope you find your answer far more clear than when you started.

    If you find this helpful, do me a favor and remember where you got it and drop me a line to tell me what you ended up deciding and how you are doing! Good luck on your adventure!

    Trout Kirch
    Horizon Agency Systems
  4. Mulligans Travels

    Mulligans Travels New Member

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    Thank you both for your replies and candid feedback.

    I will reach out to Ben to better understand how Firefly may be a fit.

    I also would like to speak with you or whoever would be your contact of choice, Trout. Would you mind sending me a phone number by PM if not in thread?
    Thanks guys!