How Many Deals Per Month to Succeed

[zee123]

Hello,
I m going as an independent agent soon and wondering how many deals do i need to close per month to be ok. My husband is auto dealer and he can give me 20 solid leads per month. I will be going streight independent and i know the first 2 years i will not make much.
thank you

 

[Jenesis Software]

Depends on how much money you need to make to be "ok". Decide how much money is enough then, using the average premium for your area for an auto insurance policy and the commission percentage you will be paid, you can determine the minimum number of policies you need to write each month. The nice part about property and casualty insurance is that if you write, for example, 50 policies per month your first year in business, and retain around 90% of those during your second year, your income should double your second year.

 

[thomasm]

What about contracts? Isn't there a lot of red tape involved? (Loss Ratios, Binding, etc)

Who will work with a newby just starting out in P&C?

 

[Jenesis Software]

Good company appointments are not easy to come by. If you have some experience, working for an agency and have been licensed for a few years, that helps. If you have no experience, it's most likely a good idea to start working for an agency to get the experience. There are a few organizations who will work with agents who need contracts where they provide the contracts with the insurance companies but they normally take a percentage. Sometimes, it's the only option.

 

[indienoise]

As has been said already,it's largely dependent on you. With the right carriers you should be able to close 90% of those leads. Your situation sounds somewhat similar to mine. I actually established my office to coincide with the family business (bhph lot) but I can get WAY more than 20 leads per month. It's the busiest lot in the county, which helps. Endless supply of lienholder notices with xdates too. Leverage the relationship you already have with those clients.
I partnered with a captive agent to get experience my first two years, then went indy. I'd recommend learning under an established agent, I would've never been able to keep a profitable book, left to my own devices. Car lot business is not the easiest to keep on the books long term AND profitable.

 

[zee123]

Thank you everyone. I am so new i dont even understand most of the terms you are mentioning here.
50k would enough considering working mostly from home, my husband would send me paperwork and i will do the deal over the phone.
Does anyone know where i can find info explaining what "contract", "target market".... means.
I know i will have a lot of Hispanic with no ssn, does that mean i need to look for a specific insurance carrier that takes this market?
Thanks

 

[indienoise]

Hispanics are a large part of my market, as well.
This will not be a from-home operation.
Pretty much ALL of the carriers you need to be competitive in this market will require a physical location, and you're going to HAVE to take cash payments. No getting around it. Even if you somehow talk the carriers into letting you work from home (you won't), that business won't stay on the books long without you servicing the clients.
A couple of the carriers I started with when I went indy had my appointment paperwork processed within 48 hours, didn't even ask me about experience. Don't take that as a good thing just because you're new though. The point I was trying to make earlier is you'll be shooting yourself in the foot just trying to make sales if you don't know what you're doing. It doesn't matter how much business you're submitting to carriers, if they're losing money because of you they won't stick around forever. You need to understand the field underwriting process (even for, or should I say, ESPECIALLY for nonstandard auto) because otherwise you'll be submitting risks that aren't properly underwritten, and either carriers will be denying coverage and your clients leaving in droves, or the carriers will be paying claims on risks they didn't charge appropriate premium for and your profitability will tank. Carriers don't just want ANY business, they want PROFITABLE business. And the market you're looking at will be composed of a lot of straw purchases and applicants not disclosing all the applicable information. Trust me on this.

You need a mentor if this is going to be a long-term thing for you.

Now, as far as making 50k/yr, that's dependent on premium more so than just applications. No matter if you're working for an indepedent agency and giving up a split, or in business for yourself and paying your own expenses, in all honesty if you're selling mainly NSA you're going to need a minimum of 500k-750k in annual premium to get there. It will depend largely on your carriers and comp rate. Let me just emphasize one more time, that's gonna be really tough for a newbie to not only achieve, but still have the carriers in your corner when you get there, if you don't know exactly what you're doing. PLEASE find someone local to you to work with or learn from.

Are these terms I'm using you confusing to you? GOOD, because you really need to learn to swim before jumping in the deep end.

 

[zee123]

Hispanics are a large part of my market, as well.
This will not be a from-home operation.
Pretty much ALL of the carriers you need to be competitive in this market will require a physical location, and you're going to HAVE to take cash payments. No getting around it. Even if you somehow talk the carriers into letting you work from home (you won't), that business won't stay on the books long without you servicing the clients.
A couple of the carriers I started with when I went indy had my appointment paperwork processed within 48 hours, didn't even ask me about experience. Don't take that as a good thing just because you're new though. The point I was trying to make earlier is you'll be shooting yourself in the foot just trying to make sales if you don't know what you're doing. It doesn't matter how much business you're submitting to carriers, if they're losing money because of you they won't stick around forever. You need to understand the field underwriting process (even for, or should I say, ESPECIALLY for nonstandard auto) because otherwise you'll be submitting risks that aren't properly underwritten, and either carriers will be denying coverage and your clients leaving in droves, or the carriers will be paying claims on risks they didn't charge appropriate premium for and your profitability will tank. Carriers don't just want ANY business, they want PROFITABLE business. And the market you're looking at will be composed of a lot of straw purchases and applicants not disclosing all the applicable information. Trust me on this.

You need a mentor if this is going to be a long-term thing for you.

Now, as far as making 50k/yr, that's dependent on premium more so than just applications. No matter if you're working for an indepedent agency and giving up a split, or in business for yourself and paying your own expenses, in all honesty if you're selling mainly NSA you're going to need a minimum of 500k-750k in annual premium to get there. It will depend largely on your carriers and comp rate. Let me just emphasize one more time, that's gonna be really tough for a newbie to not only achieve, but still have the carriers in your corner when you get there, if you don't know exactly what you're doing. PLEASE find someone local to you to work with or learn from.

Are these terms I'm using you confusing to you? GOOD, because you really need to learn to swim before jumping in the deep end.

Thank you indienoise. I will have physical location which is the car lot with suit B for insurance, also there will be an employee to take the payments throughout the day, i might will be going there for a few hours a day.
Good point on bringing someone with me to help but what would i tell that partner when i am ready to take over 100% in a few years, just kick him/her out?

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May be i should go captive? I sm reading some webs, Miia and AgentCo, are those aggregators, the ones that provide you with access to bunch of carriers for e fee, are they worth it? Or captive would be a cheaper option?

 

[indienoise]

Captive might be cheaper in terms of start-up costs, but to be competitive in your market, it won't work. I easily write 2-3x more business as indy than I did as captive, with better retention.

The aggregators like the ones you mention are great for someone with a bunch of preferred business, but might not get you access to the carriers you truly need for mostly nonstandard business. It's just not their focus, and honestly they probably aren't really looking for that type of agency.

I'm not talking about bringing on a partner. I'm talking about you cutting your teeth working with/for an existing agent. Ideally your contract with them allows you to buy out your book once you're actually prepared to go it alone. It's a tough pill to swallow, and I've spent the last year paying my dues because I had a non compete. Now I'm nearly free of it, and have come out better because of it. There's a lot more to running an agency than just selling policies.

 

[Tiesto422]

There's no definite number. Set an income goal and then figure out a way to reach that goal with the sales that you are getting. Premiums for auto insurance can vary drastically, so it is better to focus on getting quotes, then closing the deal, and then retention.