First let me say thank you to everyone contributing to other posts. I've been reading for a few days now trying to learn what I can and this site has been amazingly helpful.
I am not a licensed agent at this time but am interested in getting into insurance. I own a company that provides merchant services for businesses (in a nutshell, that means we give businesses the ability to accept credit cards). I am interested in getting into insurance to provide another way to help our customers and diversify my company. My question is what type of insurance would you recommend? Health, Life, P&C? I would think P&C and Health are the most likely candidates? I've read enough on here to know that it sounds like I need a broker (or GA?) with a lower share and more support due to my lack of experience. The last thing I want to do is lose a client because I messed up their insurance. I really don't care about up-front commissions, my current business is built on a residual model and that is what attracts me about insurance. I'm all about the long-term income potential. Any recommendations on what is easier to start in and what direction you would head if you were me? Any advice is appreciated.
A few things I'm considering:
I'm in Texas.
What product is easier to learn?
Which will require less time to manage?
Are there other obvious opportunities I'm ignoring or don't know about?
Which product has the better long-term value / turnover?
I am also in TX and have owned a business where I got many telemarketing calls about merchant services and accepting credit cards. However, I never took them up on it. I owned a service co. where I was on the road and did not have a business where I could put in a credit card machine. But, most business owners I have spoken with think the merchant services guys are raking them over the coals with high charges. I am not saying you do this, but I'm just saying that's what I'm hearing from some of them, mostly restaurants.
OK, as far as offering insurance, I have actually thought of this same concept, sort of build a "store" where you offer business merchant services, insurance, courier service, all of that. You could call it "business depot" or something. Maybe somebody took business depot as a name already. oops... edit... yep I did a search and staples has that name, apparently. We do not have many staples stores around here...
But, anyhow, one guy cannot do all of this, so most people network and get with a good agent that they refer business to, then get with a good courier company, then the agent refers your merchant service.... get a good network together. That would be my suggestion. I think yours is a good idea but for one guy to offer everything to every business- that's a stretch. I should think a referral network would be easier.
Now, if you really want to offer insurance and merchant services, and you think those two things work hand in hand.... I may suggest you first train in the supplemental markets like maybe with Colonial. Then you can learn the life market and health market later. Begin with something rather simple and easy to learn.
Last edited by HomeService : 11-11-2008 at 12:16 AM.
But, most business owners I have spoken with think the merchant services guys are raking them over the coals with high charges.
They're right, lol. Unfortunately, in our industry, there are a LOT of unscrupulous people who say one thing and do another. That's where we've found our market. We're just honest with them. It's amazing how far that goes, lol.
Thank you for your thoughts, I appreciate the input. For clarification, I wasn't going to do it all myself. I have an existing team to handle the merchant services side. My idea is that I could work the insurance side using the contacts and only handle some customer relationship aspects of the ongoing business. So, it won't just be me. Sorry, I should have said that in my first post. Thanks again for your help. Again, all ideas and thoughts are appreciated.
I sort of figured you had a team of folks selling that stuff. I am glad you have a solid business based on being honest. That is wonderful to hear. You may find that you eventually build a team of agents as well. Could be in the future: one division is for merchant services, and one division is for insurance. Business liability is another thing to look into selling. And, workers comp, although in tX it does not sell as well as other states, because we do not have a state law requiring it, so we agents sell 24 accident plans. Some of us sell those. They cover the client at home or at work. I think you may be on to something. Get with a mentor of some kind in your town.
The last thing I want to do is lose a client because I messed up their insurance.
Despite what some think, if you take your business seriously, this is not something for the casual agent. While merchant services, telephone services, auto leasing, bank loans and insurance are all things businesses need that does not mean they will have confidence in a guy (or gal) that has them all in one-stop-shopping.
workers comp, although in tX it does not sell as well as other states, because we do not have a state law requiring it,
While TX does not require an employer to have WC it does not absolve the employer in the event of a work related injury.
An accident plan is not a substitute for WC liability.
CGL policies protect the employer against claims made by clients, not employees.
An employer that does not carry WC is running a big risk. Employer liability for work related injuries includes medical bills, lost wages and loss of life and limb.
Somarco, you touch on a great point: in order to be heading into businesses around here in TX, I guess a person better brush up on the state and federal laws that talk about worker's rights and lawsuits and who is liable and such. I know for a fact, I have seen in the individual health insurance policies, where they exclude injuries at work. They presume you have workers comp at work, or the employer is liable, but who knows in TX what the employer does, so there is a gap in coverage there, while at work, SOMETIMES. I need to get with a lawyer sometime- and discuss this.
While TX does not require an employer to have WC it does not absolve the employer in the event of a work related injury.
An accident plan is not a substitute for WC liability.
CGL policies protect the employer against claims made by clients, not employees.
An employer that does not carry WC is running a big risk. Employer liability for work related injuries includes medical bills, lost wages and loss of life and limb.
Worker's Compensation insurance also provides a finite amount of liability for the employer.
If self-insured...all bets are off. Sky's the limit.
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[COLOR=blue]Don't steal - the government hates competition.[/COLOR]
If you are already in there on merchant accounts, the business liability, commercial auto, workers comp, business bonds, and group health are nice touch points, building on the service you already provide.
None of this is as easy as it sounds, and done incorrectly, could cost you some existing clients. That said, it can help you stretch your advertising dollar a bit, which is always nice.
If you are already in there on merchant accounts, the business liability, commercial auto, workers comp, business bonds, and group health are nice touch points, building on the service you already provide.
None of this is as easy as it sounds, and done incorrectly, could cost you some existing clients. That said, it can help you stretch your advertising dollar a bit, which is always nice.
Dan
So, if it were you, which of these would you pick to work on first? Are there large differences in margins from one product to the next? Are there differences in time constraints for one to the next. Obviously, if successful, I would like to branch into multiple services with an insurance "division" similar to what was mentioned above, but I really want to start slow and focus on one area so that I can have a shot of knowing what I'm doing.
Thank you to everyone who is offering thoughts, this is all really helpful info. to have for the decision making process.
If I had to pick one, I would do group health. I don't think it ties to merchant services as well as the liability / workers comp / auto does.
I see liability / workers comp / auto as a single entity, you do it all or none. Bonds are simple, no big deal, I write them as a convenience, not because I make much money on it.
Basically, I view merchant services and business insurance as necessaties of having your doors open, almost regardless of the size of your business.
Group health is a benefit, which even in small businesses, may have a different decision path than merchant service vendors. It is a fraction of the effort to get into though and is more universally available than liability insurance for a business.
Unless you write it, you may not realize that with commercial liability coverage, you need to pick markets / industries to pursue. One carrier might do restaurants but only if they are dine-in, another if they are delivery, yet another if they have over a certain percentage of alcohol sales...
"Unless you write it, you may not realize that with commercial liability coverage, you need to pick markets / industries to pursue. One carrier might do restaurants but only if they are dine-in, another if they are delivery, yet another if they have over a certain percentage of alcohol sales..."
No sir, I had no idea this was the case. This is great information to have. Are you guys concerned from a health insurance standpoint with the prospect of nationalized healthcare, or some form thereof? Or is the basic thought in the industry that the system won't possibly change that much?
I think we are headed towards a nationalized healthcare deal at some point, but I think it may be 2010 or later before it gets implemented. So, the people who need health ins are still going to buy it for the next few years at least. But, that's why I mentioned supplemental and Colonial. Supplemental is kind of recession-proof and nationalized-proof. Get with a colonial mgr in your town. They have it down to a science, they know how to approach businesses, and they know who is the best for group health. Most of the colonial agents write other stuff as well. These guys are good to "get to know" because they are top notch and know what's up, in the business market. Go talk to them- even if you decide not to go for it with them.
a gap in coverage there, while at work, SOMETIMES. I need to get with a lawyer sometime- and discuss this.
A P&C agent will work.
Just because TX doesn't require WC (an offshoot of oil company lobbying efforts) doesn't mean the product doesn't exist or that employers don't have it.
Many of the larger employers self fund with a stop loss cap. When they self fund they are required to post a bond in the amount of their SIR.
Absent a policy or stop loss, there really is no limit to what an employee can sue for when injured.
Are you guys concerned from a health insurance standpoint with the prospect of nationalized healthcare,
If you are working P & C find a good product that covers contents in rental property. You can take the product and go door to door in apartment complexes. While you are in there you can quote the autos, motorcyles, lief and health. Most folks that live in apartments for some reason or the other love company.
When I was a young agent in the 70's I worked large apartments complexes in Jackson, MS with great sucess. I worked with a Debit Company and in my early 20's lead my company week after week. I think it would still work.
Debit Company and in my early 20's lead my company week after week. I think it would still work.
It still works. I currently have a broker debit contract, and still work it. I don't put in tons of time at it. I kind of do it part time. This is why my name is "homeservice", I'm an old school debit agent.
Interesting ideas across the board. I'm going to keep researching obviously and I think I'll meet with a few people locally, as a couple of you suggested, and go from there. Thanks again to everyone who contributed advice. Anyone that wants to add anything else, feel free, lol.
Advice for my situation?
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