Forming Independent Agency - Need Insight Into The Process

[refman1]

I am looking for either master general agencies or some type of insurance conglomerate to help me get assigned with companies as a startup. I want to be a full service independent agent and offer my clients many companies to choose from for life, health, property, casualty, and financial services. Can I get some suggestions from you guys? I would like to be assigned with at least 10 or more companies for p & c and the same for life and health. I appreciate your help.

 

[Tdebruler]

I am looking for either master general agencies or some type of insurance conglomerate to help me get assigned with companies as a startup. I want to be a full service independent agent and offer my clients many companies to choose from for life, health, property, casualty, and financial services. Can I get some suggestions from you guys? I would like to be assigned with at least 10 or more companies for p & c and the same for life and health. I appreciate your help.

Hi Refman, I was captive for 4 years and it was terrible! Independent is the way to go. In my experience the companies that do P&C don't have the most competitive life insurance policies so you may want to look two separate places for p&c contracts and life insurance contracts. Or at the very least different companies.

 

[AgencyEquity]

I am looking for either master general agencies or some type of insurance conglomerate to help me get assigned with companies as a startup. I want to be a full service independent agent and offer my clients many companies to choose from for life, health, property, casualty, and financial services. Can I get some suggestions from you guys? I would like to be assigned with at least 10 or more companies for p & c and the same for life and health. I appreciate your help.

What kind of experience do you have?

 

[danaubol]

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!

There are states that require the carriers to pay the appointment fees for you. I live in one, AR. You need to check with your states insurance department to see if your state is like that. You should go through an Insurance Marketing Organization, IMO. Even if you live in a state that does not require that, the fees, depending on the lines, should not be that high. If you go through the right IMO's you should be ok. Just do a google search for Commercial lines IMO. I cant argue with the fact that it can be time consuming.
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Hi Refman, I was captive for 4 years and it was terrible! Independent is the way to go. In my experience the companies that do P&C don't have the most competitive life insurance policies so you may want to look two separate places for p&c contracts and life insurance contracts. Or at the very least different companies.

If you are looking for a Life insurance company, I would do it through an IMO, Insurance Marketing Organization. I too was a captive agent, and went on my own 2 years ago. Have not looked back. The IMO I used for Life/Annuities was Creative Marketing. Here is their website. creativemarketing.net Good luck! I agree with your statement on the P & C Companies not having the best rates for life insurance. Better to go through a carrier like Genworth or Aviva, etc. All work through IMO'S

 

[mygoal2012]

I too am trying to open my own agency. The biggest question I hope someone can help me with is this. I did NOT sign a do not compete agreement. The type of insurance that my employer sells only one other company in our area can sell. The reason I am leaving my employer is because of the way he treats his clients. He is also going out of business and selling his book in July, but does not know that I know this. The reason I know for sure is that I saw his confirmation fax that he sent to our home office that included the whole single page of his resignation. He is selling his book to his son-in-law. My question is, if I did not sign a do not compete can I get in trouble if I approach his clients to write business with me? I have been told already by the policyholders for about the last 5 years that even thou our rates are not the cheapest, they stay because I offer great customer service.

 

[HGI.Crusade]

Your dad should be able to apply to the carriers under his corporate name and assign another individual as the contacting agent if he wants to get around being worried about leaking his intentions.

 

[WinnieShelby]

wohoo... lots of comments... :-)
thanks for sharing especially moonlightandmargaritas
:-)

I would have to see more.. :-)

 

[msurrano]

getting appointed with independent contracts USUALLY isnt to time consuming or expensive, but dealing with the no compete may prove to be difficult, not sure what you can do to get around that. Also i would not get appointed with other companies until her terminates, there is ways companies can look that stuff up, best of luck!

 

[ins4every1]

More questions. Want to start Agency in Ca. Have L/A&H & P&C lic. Seems a great challenge, starting out, is getting appointmentswith carriers and required volume. And that the better carriers will notappoint an untested agency, one person office. I been researching. Saw add fromMIAA. Anybody familiar with them? It appears, according to them, you become"BIG" as soon as you join in w/them. It would also appear you may beable to start writing business, through them, until all my ducks are in a row.Am researching E&O ins @ this time. am a one man office doing someconsultant work and have a small book of business. Want to cross sell Ins. On aShoestring budget Really appreciate ANY comments. Also open to joiningw/anyothers...ie established Agency or brokers, as I start out.

 

[TiredAgent]

@ ins4every1: I think MIAA is an aggregator in the mid-West, or an agent with lots of appointments and relies of people like you to give them business. They probably have little or zero "house accounts.

IMO it's a great way to start an insurance firm, not an agency. Technically you are not appointed directly with the insurer and will have no binding authority. They're great in providing you multiple insurers without the pressure of maintaining production quotas for each insurer. Also for a "mature" firm its a way to roll over a book that is no longer big enough to keep a direct company appointment and avoids the rush to rewrite it.

However most will have a fee or charge a %, its another layer between you and the insurer, and your commission will be a few points less than you would get directly. Some aggregator's for an additional "elite" fee will give you "full" commission and direct access to the insurer's underwriter.

The best part is the book of business is yours; when you feel its time you can get your own appointment, you can tell the insurer, "hey, I got $500k of business with you already through XXX"; they'll be more apt to appoint you this way, YMMV.

I've been with one based out of Grass Valley, California, for a few years, goog it.