Does anyone Sell PC to Entire State?

[agentinsouth]

Is it time PC agents accept that direct writers have changed the insurance landscape, and the next generation no longer cares about location of a physical office. Is it time to start writing PC in the entire state. As opposed to 50 miles from my office? Any thoughts? Someone who tried it with some input?

Old school anyone? Agents have been doing this for years. I have a friend who spends between $9,000-&12,000 a month on Internet related marketing in 5 states. The return on his investment was 60% the first year about 5 years ago. Now it is closer to 35%-40% of the first years commissions.... Of course his return on renewals is still the same

I used market this way, but changed directions to the upper home owners.

 

[geoagency]

Now it is closer to 35%-40% of the first years commissions.... Of course his return on renewals is still the same

What do you mean by 35-40% of first year commissions? Whenever I calculate marketing cost, I look at the cost to acquire a household. I'm just interested in hearing how your calculating his return?

 

[agentinsouth]

What do you mean by 35-40% of first year commissions? Whenever I calculate marketing cost, I look at the cost to acquire a household. I'm just interested in hearing how your calculating his return?

That is what I gave you.

In his case, he spends $10k a month and profits $3,500 the first month. Year 2 he makes between $8k-$10k a month (not including bonuses) off the business sold the previous year that month. Then of course figure an 80% retention rate for the remaining years because he never meets the customers.

His book is f'en huge! But it is a lot of work and his staff has to react immediately to every lead to keep his close ratio.

I am sure there are easier ways to do it. I just know there similar set ups in Florida, Dallas, Pennsylvania, and LA. All four agencies are using this model and doing about the same.

 

[geoagency]

That is what I gave you. In his case, he spends $10k a month and profits $3,500 the first month. Year 2 he makes between $8k-$10k a month (not including bonuses) off the business sold the previous year that month. Then of course figure an 80% retention rate for the remaining years because he never meets the customers. His book is f'en huge! But it is a lot of work and his staff has to react immediately to every lead to keep his close ratio. I am sure there are easier ways to do it. I just know there similar set ups in Florida, Dallas, Pennsylvania, and LA. All four agencies are using this model and doing about the same.

That's why I asked for clarification.

So you are saying, he spends $10k in marketing, and after he pays rent, payroll, he "profits" $3500. So another words he puts in $10k and out comes $13,500 in the same month. I highly doubt that's what you meant.

Or you didn't mean to use the word "profit", and you meant to say he spends $10k, and makes $3500 in commission, so he is a net $6500 loss his first month on just the marketing (not to mention payroll and rent) and his renewals build up over time.

To make $8-10k in a second year renewal would mean he put on $70-100k in new PC premium a month. Which would essential mean he is growing his book by $1 million dollars in PC a year, and his gross revenue is going up $100,000 a year in just renewals.

I have seen this before, it's very rare. It requires a large capital investment into a new agency, usually north of $200,000.

I just watched my cousin write 200 new car policies a month for 12 months straight.

But these results are not typical.

The bottom line in insurance, is that agencies don't see "profit" for usually 2-3 years if not longer. After payroll, rent, and marketing, a new agency is usually going into debt or the owner is using savings to live on, till the renewals build. Many of the highest producing offices are going into extreme debt, in hopes to pay it off in large year end 6 figure bonuses.

Either way our discussion has digress from the original thread, which was, does it make sense to sell PC state wide.

The real reason I asked is because I wanted to see if anyone else had the same reservations as me. The obvious question is how do you sell, life, health and banking products to people you can't see, when you don't yet have digital signatures for every policy.

 

[agentinsouth]

That's why I asked for clarification. So you are saying, he spends $10k in marketing, and after he pays rent, payroll, he "profits" $3500. So another words he puts in $10k and out comes $13,500 in the same month. I highly doubt that's what you meant. Or you didn't mean to use the word "profit", and you meant to say he spends $10k, and makes $3500 in commission, so he is a net $6500 loss his first month on just the marketing (not to mention payroll and rent) and his renewals build up over time. To make $8-10k in a second year renewal would mean he put on $70-100k in new PC premium a month. Which would essential mean he is growing his book by $1 million dollars in PC a year, and his gross revenue is going up $100,000 a year in just renewals. I have seen this before, it's very rare. It requires a large capital investment into a new agency, usually north of $200,000. I just watched my cousin write 200 new car policies a month for 12 months straight. But these results are not typical. The bottom line in insurance, is that agencies don't see "profit" for usually 2-3 years if not longer. After payroll, rent, and marketing, a new agency is usually going into debt or the owner is using savings to live on, till the renewals build. Many of the highest producing offices are going into extreme debt, in hopes to pay it off in large year end 6 figure bonuses. Either way our discussion has digress from the original thread, which was, does it make sense to sell PC state wide. The real reason I asked is because I wanted to see if anyone else had the same reservations as me. The obvious question is how do you sell, life, health and banking products to people you can't see, when you don't yet have digital signatures for every policy.

I decided to go a different direction. I have my main office in one city and a smaller office in a close major city. I meet financial advisors, realtors, and mortgage brokers in both cities. There by, expanding my market w/ a much lower acquisition cost.

 

[geoagency]

I decided to go a different direction. I have my main office in one city and a smaller office in a close major city. I meet financial advisors, realtors, and mortgage brokers in both cities. There by, expanding my market w/ a much lower acquisition cost.

That is a great idea. My company is starting to offer multiple locations to agents in that exact situation. Usually 30 + miles apart.

 

[Heather]

=agentinsouth;955995]I decided to go a different direction. I have my main office in one city and a smaller office in a close major city. I meet financial advisors, realtors, and mortgage brokers in both cities. There by, expanding my market w/ a much lower acquisition cost.

Are you keeping this smaller office staffed, or by appt when you need it? I have considered a small second office before. It was suggested to have some one working commission only from it or have a written sales quota if they want to keep their job.

 

[agentinsouth]

=agentinsouth;955995]I decided to go a different direction. I have my main office in one city and a smaller office in a close major city. I meet financial advisors, realtors, and mortgage brokers in both cities. There by, expanding my market w/ a much lower acquisition cost. Are you keeping this smaller office staffed, or by appt when you need it? I have considered a small second office before. It was suggested to have some one working commission only from it or have a written sales quota if they want to keep their job.

Right now it is just me. However, I am currently looking for an agent to be there full-time.

 

[VaDwayne]

Is it time PC agents accept that direct writers have changed the insurance landscape, and the next generation no longer cares about location of a physical office. Is it time to start writing PC in the entire state. As opposed to 50 miles from my office? Any thoughts? Someone who tried it with some input?

I market to the entire state of Virginia but I am appointed with a well known church insurer and I visit churches usually within 100 miles but will stretch out for bigger risks, especially if the church has their insurance with a carrier that doesn't specialize in church insurance.

I had a lead just this past Friday that I drove an hour and a half for. It sounded very good on the phone but when I got there I found out that I was only told partial truths and I explained that I needed to get the coverage re-quoted. When I called the owner this morning to inquire about his REAL payrolls, he started acting a fool. I politely told him to find another agent and sent him an email that we weren't going to insure him, that he had no coverages with me, and best of luck. Let somebody else write that trash, and somebody will. I couldn't imagin driving 3 hours to find this out.