Hello,
This forum has helped me to get a lot of information and insights about the insurance industry. Thank you to all that take part in this forum.
I am new to the industry, and just got licensed both in P&C and Life a couple months ago. I've recently applied for a Business Entity license in California to start out my own agency.
Of course, as many new agents may know, the most difficult task that I am facing is meeting the insurance carrier's "on-the-job experience" requirements. Almost all require a 2 year experience before getting appointed.
I've also looked into options like the Insurance Noodle, Networked Insurance Agents, SIAA, and the like, but all require a minimum of 2 years experience.
So I am wondering, how did many of you here (that have their own agency) first start out in the insurance industry? What are some routes that you can take to start getting involved in this industry? Is it inevitable to go work for a captive first?
Any insights will be appreciated.
Thank you.
How Did You All Get Started?
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New ins guy, how did you get a life and P&C appointment without being sponsor by a carrier.
I believe in CA, you need to be sponsor. It's be long time maybe the requirements have changed or your in another state. The insurance industry is a very changing place. Many of us have been sponsor by direct writers, and later want out on our own. Many us have taken over parents agency. Many buy agency after having plenty of experience running one. Hartford, Allied, Safeco, Allstate, S Farm.
All have programs to teach you their appetite and business model for that company only. You would be their Agent not a broker they have first rights to refusal of all business. I will tell you this 90% of
the students in any insurance class will fail, the nexts 5% will be gone in 1 year. I'm sorry but it's that simple. We can and do make a lot money. You need at least 3 years of financial help. And don't waste your time selling personal lines write Commercial, let street corner agent write that junk
I believe in CA, you need to be sponsor. It's be long time maybe the requirements have changed or your in another state. The insurance industry is a very changing place. Many of us have been sponsor by direct writers, and later want out on our own. Many us have taken over parents agency. Many buy agency after having plenty of experience running one. Hartford, Allied, Safeco, Allstate, S Farm.
All have programs to teach you their appetite and business model for that company only. You would be their Agent not a broker they have first rights to refusal of all business. I will tell you this 90% of
the students in any insurance class will fail, the nexts 5% will be gone in 1 year. I'm sorry but it's that simple. We can and do make a lot money. You need at least 3 years of financial help. And don't waste your time selling personal lines write Commercial, let street corner agent write that junk
Sanddog,
Thank you very much for your comments. Reading through the posts, it does look like the money is in Commercial Policies and not Personal Lines.
Just to clarify, can I ask you why? Is it because the commission is higher, or because there are less claims on Commercial Policies? Do you have other reasons why writing Commercial is where the money is in this industry?
I'm also wondering how others get started in this industry. I guess majority start out with Direct Writers for a few years or work at their parent's agency. I wonder if there are other ways...
To answer your question, getting licensed in California is easy. Classroom then exam. Getting appointed with a P&C Sponsor is the hard part. I'm hoping to find somebody with some experience to get appointed with NIA to get my operation rolling. Does anybody know a place where I can network with aspiring, ambitious brokers?
Cvoorhees: Good luck with your agency. I hope it's not true that 90% drop out too.
Thank you again for those that participate in this forum to help out other new members. It means a lot!
Thank you very much for your comments. Reading through the posts, it does look like the money is in Commercial Policies and not Personal Lines.
Just to clarify, can I ask you why? Is it because the commission is higher, or because there are less claims on Commercial Policies? Do you have other reasons why writing Commercial is where the money is in this industry?
I'm also wondering how others get started in this industry. I guess majority start out with Direct Writers for a few years or work at their parent's agency. I wonder if there are other ways...
To answer your question, getting licensed in California is easy. Classroom then exam. Getting appointed with a P&C Sponsor is the hard part. I'm hoping to find somebody with some experience to get appointed with NIA to get my operation rolling. Does anybody know a place where I can network with aspiring, ambitious brokers?
Cvoorhees: Good luck with your agency. I hope it's not true that 90% drop out too.
Thank you again for those that participate in this forum to help out other new members. It means a lot!
cvoorhees, Ok I'll make it simpler you guy's and gal's. There are 4 way to get started that I know of, in this Business.
1) get appointed w/carrier go to their school. They will start you out with a draw against your anticipated commission for one year. You must sell policies as fast as you can and LEARN as much as can. They will NOT give you policies to service. :unsure:
2) take over your parents agency and learn. :rolleyes:
3) Go to a broker like me who will teach you and support you and split commission, that's the best way. WORK PART TIME don't quick your day job. <_< (Don't call me I'll call you). :ph34r:
4) See number 1 and 3. That's it.
FYI, if it was simple everyone would be in sales. That's wear the money and freedom is right! And 10 hour days No paid holidays, no sick days, no 10 minium coffee break. but lets of freedom golf, surfing yey baby.
Ok last question, commercial over personal lines. What would you rather make 15% of $10,000, $50,000 or 15% of 500.00. Remember don't be concerned with the numbers it all the same your just adding a few 00. Less service work on a $50,000 account then two auto policies.
90% rule ok I'll adjust 85%. I can tell you guys this, it's not that you can't pass the different tests or learn and underwriting insurance. Its going to be the class full of wantbe insurance people that can't sell "period"?. There is no other reason.
1) get appointed w/carrier go to their school. They will start you out with a draw against your anticipated commission for one year. You must sell policies as fast as you can and LEARN as much as can. They will NOT give you policies to service. :unsure:
2) take over your parents agency and learn. :rolleyes:
3) Go to a broker like me who will teach you and support you and split commission, that's the best way. WORK PART TIME don't quick your day job. <_< (Don't call me I'll call you). :ph34r:
4) See number 1 and 3. That's it.
FYI, if it was simple everyone would be in sales. That's wear the money and freedom is right! And 10 hour days No paid holidays, no sick days, no 10 minium coffee break. but lets of freedom golf, surfing yey baby.
Ok last question, commercial over personal lines. What would you rather make 15% of $10,000, $50,000 or 15% of 500.00. Remember don't be concerned with the numbers it all the same your just adding a few 00. Less service work on a $50,000 account then two auto policies.
90% rule ok I'll adjust 85%. I can tell you guys this, it's not that you can't pass the different tests or learn and underwriting insurance. Its going to be the class full of wantbe insurance people that can't sell "period"?. There is no other reason.
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NorthridgeIns
- Insurance Journal Enthusiast
- Posts: 8
- Joined: Mon Apr 04, 2005 2:11 pm
I have a relatively new agency (about 2.5 years), and I am still fighting a lot of the carrier battles, but there does seem to be light at the end of the tunnel.
To add to the C/L vs P/L discussion, to make it within P/L you need to have very competitive rates because the customers are not loyal; (how often have your shopped your car insurance recently?); and then you need a huge customer base. As far as competitive rates, there is a reason the direct writers such as State Farm and American Family, and Farmers have such high market shares.... their rates are dirt cheap.
On the commercial side, there seems to be more loyality amount customers, if you take good care of them, they tend to stay and renew. Plus there is the potential of larger accounts.
If you are being forced to look at aggregators such as NIA and Insurance Noodle, I can say that I have worked with both. NIA's strength is in California (not Colorado were I am), they have a strong C/L group and a strong P/L group. If you are decide to concentrate on C/L, I would say InsuranceNoodle is actually a better idea. The cost of doing business with them is much less.
Northridge
To add to the C/L vs P/L discussion, to make it within P/L you need to have very competitive rates because the customers are not loyal; (how often have your shopped your car insurance recently?); and then you need a huge customer base. As far as competitive rates, there is a reason the direct writers such as State Farm and American Family, and Farmers have such high market shares.... their rates are dirt cheap.
On the commercial side, there seems to be more loyality amount customers, if you take good care of them, they tend to stay and renew. Plus there is the potential of larger accounts.
If you are being forced to look at aggregators such as NIA and Insurance Noodle, I can say that I have worked with both. NIA's strength is in California (not Colorado were I am), they have a strong C/L group and a strong P/L group. If you are decide to concentrate on C/L, I would say InsuranceNoodle is actually a better idea. The cost of doing business with them is much less.
Northridge
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pita3333
- Insurance Journal Addict
- Posts: 216
- Joined: Tue Dec 23, 2003 10:22 am
- Location: Greater Los Angeles Area
Regarding NIA...IMHO they grew too fast and have not been able to attract or train (not sure which it is) well enough to handle what they have.
Like any MGA (lets face it thats what they really are) its all about your relationship with the person assigned to your agency. The person I worked with on the WC side was/is either totally inept or totally over burdoned...she is not able to give the service that I would expect from a partner in my business.
As for how to start...I can not imagine comming into this business with absolutely no experience other then what you are taught in a license class! My suggestion...go to work for a medium or larger agency in your area (they always seem to need people) and learn learn learn learn learn! Try to advance as much as possible...then break away and start your own...or even better...buy into an agency or buy an agency that is retiring.
Thats my 2 cents worth..
Like any MGA (lets face it thats what they really are) its all about your relationship with the person assigned to your agency. The person I worked with on the WC side was/is either totally inept or totally over burdoned...she is not able to give the service that I would expect from a partner in my business.
As for how to start...I can not imagine comming into this business with absolutely no experience other then what you are taught in a license class! My suggestion...go to work for a medium or larger agency in your area (they always seem to need people) and learn learn learn learn learn! Try to advance as much as possible...then break away and start your own...or even better...buy into an agency or buy an agency that is retiring.
Thats my 2 cents worth..
Michael Trouillon
Greater Los Angeles area
Consultant/Trainer agency automation system
Industry since 82
Past: Compliance Mgr master pol pgm, Ops Mgr, Marketing Mgr, Account Mgr
Greater Los Angeles area
Consultant/Trainer agency automation system
Industry since 82
Past: Compliance Mgr master pol pgm, Ops Mgr, Marketing Mgr, Account Mgr
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NorthridgeIns
- Insurance Journal Enthusiast
- Posts: 8
- Joined: Mon Apr 04, 2005 2:11 pm
<!--QuoteBegin-sanddog+Apr 13 2005, 12:46 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (sanddog @ Apr 13 2005, 12:46 PM)</td></tr><tr><td id='QUOTE'><!--QuoteEBegin--> cvoorhees, Ok I'll make it simpler you guy's and gal's. There are 4 way to get started that I know of, in this Business.
1) get appointed w/carrier go to their school. They will start you out with a draw against your anticipated commission for one year. You must sell policies as fast as you can and LEARN as much as can. They will NOT give you policies to service. :unsure:
2) take over your parents agency and learn. :rolleyes:
3) Go to a broker like me who will teach you and support you and split commission, that's the best way. WORK PART TIME don't quick your day job. <_< (Don't call me I'll call you). :ph34r:
4) See number 1 and 3. That's it.
FYI, if it was simple everyone would be in sales. That's wear the money and freedom is right! And 10 hour days No paid holidays, no sick days, no 10 minium coffee break. but lets of freedom golf, surfing yey baby.
Ok last question, commercial over personal lines. What would you rather make 15% of $10,000, $50,000 or 15% of 500.00. Remember don't be concerned with the numbers it all the same your just adding a few 00. Less service work on a $50,000 account then two auto policies.
. [/quote]
90% rule ok I'll adjust 85%. I can tell you guys this, it's not that you can't pass the different tests or learn and underwriting insurance. Its going to be the class full of wantbe insurance people that can't sell "period"?. There is no other reason.
I have to agree with the 85% rule and to stress, you will get 85% of your income from 15% of your customers. You will get 85% of your headaches, certificate requests, and other programs for 15% of your accounts (and this 15% is usually small BOP type accounts).
1) get appointed w/carrier go to their school. They will start you out with a draw against your anticipated commission for one year. You must sell policies as fast as you can and LEARN as much as can. They will NOT give you policies to service. :unsure:
2) take over your parents agency and learn. :rolleyes:
3) Go to a broker like me who will teach you and support you and split commission, that's the best way. WORK PART TIME don't quick your day job. <_< (Don't call me I'll call you). :ph34r:
4) See number 1 and 3. That's it.
FYI, if it was simple everyone would be in sales. That's wear the money and freedom is right! And 10 hour days No paid holidays, no sick days, no 10 minium coffee break. but lets of freedom golf, surfing yey baby.
Ok last question, commercial over personal lines. What would you rather make 15% of $10,000, $50,000 or 15% of 500.00. Remember don't be concerned with the numbers it all the same your just adding a few 00. Less service work on a $50,000 account then two auto policies.
. [/quote]
90% rule ok I'll adjust 85%. I can tell you guys this, it's not that you can't pass the different tests or learn and underwriting insurance. Its going to be the class full of wantbe insurance people that can't sell "period"?. There is no other reason.
I have to agree with the 85% rule and to stress, you will get 85% of your income from 15% of your customers. You will get 85% of your headaches, certificate requests, and other programs for 15% of your accounts (and this 15% is usually small BOP type accounts).
Sanddog, NorthridgeIns, and Pita3333,
Thank you very much for your comments. All of them are very helpful, and it really helps me to figure out which direction we should take.
Going back to the post by Sanddog,
"3) Go to a broker like me who will teach you and support you and split commission, that's the best way. WORK PART TIME don't quick your day job."
This is the route that we are currently hoping to pursue.
We feel that we have access to a very niche market that we can pursue to produce a good number of leads and sales as long as we have a broker that can teach and support us.
Now, with regards to the commission split, what do you think is a fair split to start out with initially?
Our current proposal is an automatic 25% of net commission to the broker on any business that we bring in. On the business that the broker brings in, we will take a 15% cut, just to cover for the agency related expense.
*We still have not figured out how to split expenses since I'm still a bit lost on how expensive the E&Os are for P&C.
Now, do you think the split is fair? If you were the broker, would you take up an offer like this?
Thank you again for all of your assistance. It really does mean a lot!
Thank you very much for your comments. All of them are very helpful, and it really helps me to figure out which direction we should take.
Going back to the post by Sanddog,
"3) Go to a broker like me who will teach you and support you and split commission, that's the best way. WORK PART TIME don't quick your day job."
This is the route that we are currently hoping to pursue.
We feel that we have access to a very niche market that we can pursue to produce a good number of leads and sales as long as we have a broker that can teach and support us.
Now, with regards to the commission split, what do you think is a fair split to start out with initially?
Our current proposal is an automatic 25% of net commission to the broker on any business that we bring in. On the business that the broker brings in, we will take a 15% cut, just to cover for the agency related expense.
*We still have not figured out how to split expenses since I'm still a bit lost on how expensive the E&Os are for P&C.
Now, do you think the split is fair? If you were the broker, would you take up an offer like this?
Thank you again for all of your assistance. It really does mean a lot!
No it's not fair, and this is a hard question to answer. I need to know who's paying your E & O ? Who's paying the office rent and expensive, who's paying the CSR to look over your shoulder, so you don't have and E & O claim. Who has control of this issued policy.
Most carriers DO NOT want outside broker business. If your not appointed your not in control of business. If you get involved with insured issued, your appointed broker could loose their appointment. If your part of all above then you need to be W2 employee to save the broker ass. :blink:
Then to answer your question 40% new and renewal business 60% goes to the agency. If your producing and making money, the agency should provide some benefits like health 401K. YOU MUST PRODUCE, do not waste your time with home and auto.
Ok, now on the other side if none of the above is true, then broker can pay you a finder fee, even work out a renewal deal, but they have control the insured should never ever discuss protection with you. I am now exhausted with this topic, I'm done <_<
Most carriers DO NOT want outside broker business. If your not appointed your not in control of business. If you get involved with insured issued, your appointed broker could loose their appointment. If your part of all above then you need to be W2 employee to save the broker ass. :blink:
Then to answer your question 40% new and renewal business 60% goes to the agency. If your producing and making money, the agency should provide some benefits like health 401K. YOU MUST PRODUCE, do not waste your time with home and auto.
Ok, now on the other side if none of the above is true, then broker can pay you a finder fee, even work out a renewal deal, but they have control the insured should never ever discuss protection with you. I am now exhausted with this topic, I'm done <_<
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independent guy
- Insurance Journal Addict
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- Joined: Thu Dec 09, 2004 12:26 pm
<!--QuoteBegin-sanddog+Apr 12 2005, 01:04 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (sanddog @ Apr 12 2005, 01:04 PM)</td></tr><tr><td id='QUOTE'><!--QuoteEBegin--> And don't waste your time selling personal lines write Commercial, let street corner agent write that junk [/quote]
Wow, I guess my boss is wasting his time then, taking home around $200,000 a year from 95% personal lines business. Personal lines is also supposed to be the most profitable type of insurance business right now.
Wow, I guess my boss is wasting his time then, taking home around $200,000 a year from 95% personal lines business. Personal lines is also supposed to be the most profitable type of insurance business right now.
Independent guy ...... First of all I was ask a simple question how to make money in this business quickley. And it ain't writing home & auto.
Secondly, no offence met but the most profitable business to any agency is Commercial. I'm sure not one single broker, who owns or has owned and agency would disagree.
***if you're a SF ,allstate, farmers, you will never have that understanding, sorry but that's a fact.
Thirdly, home/auto has a tremendous amount of service work. Your boss's net is more like 110,000. If his gross is 200,000. My guess is 3000 to 4000 PFI inforce. God help him.
Guess what your boss could do the same with and average of 200 to 500 PFI in BOP form. And the average premium would have to be $3000.00 to maybe 5000.00. The bad new for you is he only needs one person to service.
You must have minium of 3 to personal lines CSR's to service any book of that size. I have been there and done it, hated it.
Secondly, no offence met but the most profitable business to any agency is Commercial. I'm sure not one single broker, who owns or has owned and agency would disagree.
***if you're a SF ,allstate, farmers, you will never have that understanding, sorry but that's a fact.
Thirdly, home/auto has a tremendous amount of service work. Your boss's net is more like 110,000. If his gross is 200,000. My guess is 3000 to 4000 PFI inforce. God help him.
Guess what your boss could do the same with and average of 200 to 500 PFI in BOP form. And the average premium would have to be $3000.00 to maybe 5000.00. The bad new for you is he only needs one person to service.
You must have minium of 3 to personal lines CSR's to service any book of that size. I have been there and done it, hated it.
I too have found it difficult to get other than work comp appointments in California which I seem to have no problem getting because of our volume and loss ratios. But, when we decided to expand our operations to include commercial and personal lines I found that it was a whole different world almost like being a brand new agent. What we have done with Comp and benefits seemed not to count at all. I did business with Superior Access on the comp side (AIG,ACE,Zenith,Safeco,Hartford,Employers, etc) and never really looked at much else they had until running into P&C appointment difficulties and found that they had most everything there that I needed to build a personal lines book and a commercial book with some good company names (Hartford, Safeco, Travelers, AIG, CNA, etc.) and started quoting online with them. That worked out pretty well for us. Then they announced a their Direct Access program and said that they could get good agencies direct appointments with some of these companies. I checked around and found that they could and that the price was really reasonable compared to SIAA and others and signed up for that service. Now I'm entering and binding directly in several insurance company systems for personal and commercial and getting what seems to me a higher commission that I could get with a new appointment without them (I think we're getting something like 85% of their gross commission now plus profit sharing).
I would obviously rather have gotten these appointments myself, but superior access is filling in for me really nicely right now. I own my own book and the policies that I write directly issue with my name on them too so I will be able to use that data to show other carriers in another year or so, or atleast I hope the loss results are good enough to show.
Probably not for everyone, but it's working out well for us and might work well for the new guy too.
I would obviously rather have gotten these appointments myself, but superior access is filling in for me really nicely right now. I own my own book and the policies that I write directly issue with my name on them too so I will be able to use that data to show other carriers in another year or so, or atleast I hope the loss results are good enough to show.
Probably not for everyone, but it's working out well for us and might work well for the new guy too.
What about starting out on the company side?
I started out with Farmers about 10 years ago as a captive, went through their training program and did ok for a few years. I then worked for an independent agency before moving to an insurance company 3 years ago.
My company, Hartford, frequently hires people with no insurance experience and trains them extensively. Underwriters and CSR's go through months of training and then a shadow program after that. Other companies have similar programs and it's a great way to get started in the business. You don't have all the freedom you would have as your own boss but in exchange you get a steady paycheck.
Newagent, the reason why there is more money in commercial is just due to the premium size. You get paid 10-15% commission on policies you sell. A small commercial account can be $25,000 in premium, meaning $2,500 or so in commissions. You would have to write a lot of auto & home policies to get to $25,000 in premium. Look at your own auto policy & see how many you would have to sell a month to make a good income.
There's not a quick way to get rich in this business but I think that's the way it is for most lines of work. Give it 10 years of hard effort and it will probably pay off better than most other occupations.
I started out with Farmers about 10 years ago as a captive, went through their training program and did ok for a few years. I then worked for an independent agency before moving to an insurance company 3 years ago.
My company, Hartford, frequently hires people with no insurance experience and trains them extensively. Underwriters and CSR's go through months of training and then a shadow program after that. Other companies have similar programs and it's a great way to get started in the business. You don't have all the freedom you would have as your own boss but in exchange you get a steady paycheck.
Newagent, the reason why there is more money in commercial is just due to the premium size. You get paid 10-15% commission on policies you sell. A small commercial account can be $25,000 in premium, meaning $2,500 or so in commissions. You would have to write a lot of auto & home policies to get to $25,000 in premium. Look at your own auto policy & see how many you would have to sell a month to make a good income.
There's not a quick way to get rich in this business but I think that's the way it is for most lines of work. Give it 10 years of hard effort and it will probably pay off better than most other occupations.
Kevin Rasmussen AU, CIC