Who Focuses on NON Standard Business?

[shawnmwalker]

NS- What can I say... I worked in that segment of the industry for 10 years as an agent and as a Carrier manager (Managing over $100,000,000 in WP)

I loved that segment. It drives me crazy when a preferred agent thinks they are so much more elite because they write a $2,000 auto/home package when the NS agent is writing a $3,500 monoline Auto policy and making more money.

I have worked on the carrier side for Preferred and NS carriers and often times the NS carriers had better loss results/ lower expense ratios and subsequently more profit to share with their agents.

NS does not retain well. 50-60%. That is a reality! There are correct ways and incorrect ways of writing and servicing this segment of the industry in order to see profit. There are huge amounts of money to made in this segment if done correctly.

 

[insurance1822]

NS- What can I say... I worked in that segment of the industry for 10 years as an agent and as a Carrier manager (Managing over $100,000,000 in WP)

I loved that segment. It drives me crazy when a preferred agent thinks they are so much more elite because they write a $2,000 auto/home package when the NS agent is writing a $3,500 monoline Auto policy and making more money.

I have worked on the carrier side for Preferred and NS carriers and often times the NS carriers had better loss results/ lower expense ratios and subsequently more profit to share with their agents.

NS does not retain well. 50-60%. That is a reality! There are correct ways and incorrect ways of writing and servicing this segment of the industry in order to see profit. There are huge amounts of money to made in this segment if done correctly.

Could you elaborate more on the metrics of how an agent is making more money in this market at 50-60% retention? Yes...I make more on a $2,000 preferred package then on a $3,500 monoline non standard auto. Even at only 90% retention
I'm finding it difficult to see the comparison to what you're suggesting. That's not including the ethical dilemma of writing state minimums all day..

In my market theres only a handful of truly nonstandard only agencies. I know them well (inside and out) and those agencies don't hold a candle to mine in every single aspect & none of them could sell their books if they wanted.

Maybe from a carrier standpoint there's money to be made...?

 

[BlockO]

Could you elaborate more on the metrics of how an agent is making more money in this market at 50-60% retention?

It's not 50-60%. It's higher than that.

It's only 50-60% retention on paper from the carrier's perspective. From an agent's perspective and in reality, it's significantly higher than that due to in-agency transfers.

For example: if I write a policy and then 6 months later at renewal, I find the same client a cheaper rate with one of my other carriers and switch them, that shows up as a ding on my retention rate. But as long as the clients stays on my books what do I care?

If you adjust in-agency transfers, the real retention rate would be more like 70-85%. Still not as high as preferred retention rates, but nowhere close to 30-40% less.

 

[shawnmwalker]

Block O got it correct!