Summary of comments for new start-up
Posted: Fri Aug 18, 2006 6:32 am
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!
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!