Insurance Journal Forums

I have had good response to this forum in addition to private messages about the best way to get started. Following is a summary of comments. Now, this is only a summary but hopefully will cover most of what I received:

1. Since direct appointments are virtually impossible for start-ups, joining some type of buying group or cluster is adviseable.

2. Groups that charge exit fees or have blackout periods for carriers that were appointed through them should be avoided (groups likes SIAA, SmartChoice, Iroquois, etc.). Though they are used by some successfully, the exit strategy is not desireable and you cannot get direct appointments for 2-years if you received an appointment with a carrier through them (this is the only negative I received from SmartChoice).

3. Groups where this isn't a problem (InsuranceNoodle, AgentSecure) are an alternative but the commission splits are lower. Based upon my due diligence, the disparity can be as high as 4%-7% on new & renewables.

4. The most interesting comment was the possibility, though very unlikely, of becoming a sub-agency under another group (say like an agency out of town) who would let you get started but it would be your book of business. Of course, some type of renumeration would be structured for the agency allowing this.

5. Buying out a small agency was suggested. However, many well-established insurance agencies already have mined this field.

6. The last option that has been suggested is to run away from p&c as fast as you can.

As I stated, this is a general summary. As a reminder, we are a small financial planning/ investment firm looking at adding a p&c business unit to our current offering. We are small-town America with an insurance shop on every corner and in between as well.

If I missed anything of importance, fell free to comment. Best to all!

I think you also need to gut check your business motivation. If yours is a successful Financial/Benefits type operation, are you looking to just accomodate your clients who are loyal and have expressed interest in your firm handling all of their policies?

As you point out, in your 'small town America' there are P&C shops on every street and corner, so from a business plan standpoint, what are you going to do that is different? If a prospect doesn't have a current relationship with you, what's going to motivate them to switch to you? Are you going to emphasize personal lines, commercial or both?

If what you're trying to do is take care of your current clients with occasional P&C work, then a good MGA might suffice without the hassle of production requirements. You'll place what you place, and chances are, the client is already bonded to you and you won't be fighting the competitive pressures.

If you're trying to jump start a true P&C adjunct, then you've got your work cut out for you.

Good luck.

Thanks for your reply. Yes, i would incorporate personal & commercial. I would especially emphasize commercial we we do some business work now.

You are also correct in that it is a matter of offering a better mousetrap. My fear is we will be another one of many. I mean, just how much can one differentiate thier p&c over another, especially in start-up?

One thing I would hope to do is emphasize our "advisory" approach. My firm is a registered investmetn advisor with teh state and thereby can work for fees and we are fiduciaries. I know this does nto have a direct implication on p&c, but maybe the "attitude" would.

When you mention an MGA, are you referring to local groups or those that I mentioned in my summary?

Lastly, we do have our work cut out for us, and probably too much to move ahead with this plan.

Thanks!