Forming Independent Agency - Need Insight Into The Process

[voelkerins]

Look, I came here asking for explanation... not just a simple "He is right". If it does cost money, how much? We aren't BROKE. My family has money for a start-up operation but I am doing the leg work to see how much, or if anyone has any info on WHERE to start looking.

I cannot even find a number to call on any major carriers to inquire about their application process. If you have that info, it would help.

You strike me as the type who never explains anything, and it leaves me wondering why you even spend time on a forum that is meant to SHARE information... - not just provide one-line answers.

This site is hard to get anyone to give you a good answer

 

[P&CGuru]

Hi Everyone. I have been reading through this forum since joining today and can only hope to have my questions finally answered after weeks of researching to no avail.

First, let me start off by telling you all about myself really fast...

I am not an insurance agent. However, my dad is. He's been in the business for several years and works for an independent agency as a "commercial lines producer". Recently, I raised the question of starting his own independent agency. His responses to WHY he is reluctant to starting his own independent agency are what led me to this forum seeking answers.

1. He believes that establishing contracts with carriers is very expensive and time consuming. I believe there MUST be an easy way to do this... Can some of you please provide some insight into this process. With exception to application fees, are there really some major costs involved with gaining carrier contracts or is my dad just simply wrong?

2. He also believes that if he applies with the carriers during the start-up process of his agency, some word will leak back to his current employer and all hell will break loose. Is there some protocols in place to prevent this from happening or should he end employment BEFORE applying for carrier contracts? What do you all recommend?

3. I am aware that he signed something with his current employer regarding non-competes with his book of business. If he honors that, but a client insists on following my dad to his new business... is there anything the employer can do or is he safe? My father is a very trustworthy person and would never maliciously harm his former employer by intentionally violating any contract he has with them. I just want to know what some of your thoughts on this are and how he should handle it.

I have a bunch more questions, but I think these three are good to start with. Thank you in advance to anyone willing to help answer these!

Your dad should be proud of you. Don't let anyone talk you out of this without constructive criticism but do listen to the people on here as they are vets. Here is my take on it, while it may be tough to get direct appointments it isn't impossible. I know this coz i helped a friend of mine that used to be captive open an independent from scratch and we got her appointed with travelers commercial and personal lines, Hartford, Grange, Progressive, she also got set-up with Superior Access. You basically have to make them believe that you are going to be a solid agent and have a flawless business plan, plus be very very convincing. Take them out to lunch and wow them, and then call them periodically until they want to give you a chance. But you will need to have an office space and have a marketting plan to spend lots of money. If you dont have the capital (70-100k depending on market) forget about it because even if a carrier appointed you, you wont succeed anyway.

But still, your biggest problem could be the fact that your Dad doesnt seem too enthusiastic about the idea and may not be cut out to be an Agency owner. Entrepreneurship is not for everyone and trying to force it on him could be a bad idea.

 

[Sales71]

I think this is not the kid speaking. Its the dad under cover!!

 

[jodieB]

Im afraid your dad is correct.

 

[Plinker007]

I agree that there are a bunch of naysayers in this forum. They may be your dads boss and don't want to lose that free money he is making them. LOL
As far as finding info on company appointments, GOOGLE the companies and call them.
I was captive, then worked for a crooked old independent agent that screwed me out of a bunch of money so I started my own agency in my home. I moved from personal lines to commercial. I love it. I go through brokers. Sure I make less money and don't get the huge bonuses, but that's how you get your foot in the door. Once you start writing a lot of business, you then contact the companies you are placing the most business with and ask for a contract. Show them what you've written, then Agent of Record it to your own contract. It's not hard. Once you have your own contract, you will get higher commissions and more bonuses. Now I grab commercial policies and write the owners and employees personal lines. Personal lines follow commercial, not the other way around. I don't even solicit personal lines now. I just do it as favors for my customers and friends that ask. REFERRAL is the best way to grow. ALWAYS ask. I havn't bought a lead in 5 years.

 

[ohsaycanuc]

Have you looked into joining one of the many agency alliances such as SIAA? They help you with appointments and due to the combined premium production of all their members, the production requirements are not as high in some cases zero, so you don't have to make minimum production committments. That is a big help in starting a new agency.

There are many such alliances out there. There are fees involved but they do help you get started. Check them out

 

[Underwriter2Agent]

I have a great carrier for E&O I am paying 672$ for 1mill/2mill with a 2500$ ded. Let me know ill pass on the info.

 

[RookieProducer]

I have been searching for the right relationship. I have a ton of contacts and large book of business that I can develop. I want to own my accounts and eventually either partner up as a co-owner, or be able to open my own brokerage in 5 years....

You get to make a lot of money from me, and I will keep the accounts I open with you, even if I go on my own, as long as we have an agreement that I will be paid on the business I bring in.

This is fair, since, I have no salary or benefits, and am bringing in my family and associates who own over 1000 buildings in NYC.

I can be reached at 646-261-6044 to discuss or at [email protected]

Please contact me if you are looking for someone that can drum up a ton of business.... I have dished off a lot of business in the last 2 months, as I search for the right relationship...

 

[AgencyEquity]

Visit my site, there is an entire section for those looking to Start an Insurance Agency - you will have more resources and learn more than you will ever need on this site.

 

[Jenel40]

Why not take the test and become an agent yourself, with your Dad assisting in some major capacity?