real estate/ insurance cynergie

[foofin]

I am currently a captive insurance agent and am obtaining my real estate license. upon doing so i have been approached by a real estate firm that would like to open an insurance arm to their operations. To me this a great idea. I am trying to figure out a way that would best cynergize this partnership. We have an established insurance agency and they have a reputable real estate agency. Has anyone ever done this? The real estate agent is also looking to obtain an insurance lic. I am trying to make this the best situation for all and explain that it is not easy for them to just jump right into from scratch. Instead I would propose a satelitte type office in their existing business.

I am proposing to bring the knowledge and servicing of accounts and no quotas to keep partnership. But them signing a non compete clause is vital in my eyes to allow us to both do business. Is this something I should warn about?

Just curious to hear some opinions as to how people would navigate or have done so in the past?

[Insurance101]

I would be very careful how you structure this arrangement. First, they would need to get their Ins License in order to get paid a commission split from you. Having ownership or a percentage of ownership must be key to you doing the deal. Otherwise you run the risk of writing policies for them in which they could later BOR or move them over to other carriers if they decide to eventually sell insurance themselves. You would have then added no increased value to your agency in the long run. Current income and adding value to your agency are two factors you need to be concerned with. Current income would be commissions you receive, but the agency value can only be increased if you own the business (or a percentage). You should get this all out in the open before hand. You'll get an idea what their actual long term plan is, which may not include you down the road.

Good Luck.

[aplessing]

This is more difficult than making sure that the Real Estate Agency is licensed. Some Insurance Commissioners view the business generated by the realtor's captive agency as "captive"