Buying a P&C Book of Business

[jmdriver]

I have ten years of experience in insurance as an underwriter for both personal and commercial lines. I am planning on starting my own agency and would like to purchase a P&C book of business to start servicing and generating revenue rather quickly.
Of course I know it's not as easy as that. I assume that I would have to be appointed with all the carriers that the previous agent had written insurance with.
With only a business plan and no valid sales experience to speak of, I don't think I'm going to get too far.
Am I correct? If so, how would someone in my position go about purchasing a book of business? Would a good idea be to purchase it together with an agent who does have the experience to get the appointments?

 

[FLInsa]

Because I have seen so many underwriters jumping over to the retail side crash and burn, my friendly advice to you would be to find a good agency to work for as a producer, see if sales is right for you, fine tune your sales skills, then invest your hard earned dollars in your own agency.

Remember: underwriting is one thing. Selling is a different thing. It looks easy. But it isn't and that is why so many don't make it.

Good luck!

 

[jmdriver]

Thanks FLInsa, that's good advice. I have actually taken a sales course, and worked as a producer, and my last job as an underwriter was a production underwriter working on base + commission. The problem is only 20% of my total experience is in sales and not sales in the specific line I am planning to sell at my agency. I'm very aware of the differences between selling and underwriting and how difficult selling is. I know some solid sales people as well that would be willing to join me, I'm going to concentrate more on the marketing and administration side which is my speciality.
My question is specifically regarding acquiring a book of business with little to no sales experience, or more specifically what goes into buying a book of business?
Do you need to be appointed with all the carriers first?

Once again-

How would someone in my position go about purchasing a book of business? Would a good (or feasible) idea be to purchase it together with an agent who does have the experience to get the appointments?

 

[jmdriver]

Thanks for the valid career advice; however I’m not exactly an underwriter looking to jump into sales completely blind. Perhaps I should clarify that my role in the agency will be one of administration and marketing (very limited sales), but I am taking on the financial responsibility, so the book will technically be owned by me. I am looking for specific information as to how to purchase a book of business with limited sales experience, so as to see if it’s an option to include on my business plan for the agency.

 

[xrac]

I have posted these links elsewhere but this may be useful information for you:

Building an Agency - Practice Management - Agent's Sales Journal

Building an Agency: How to Do It, From Those Who Have - Practice Management - Agent's Sales Journal

 

[bobson]

When you buy another agent's book generally you buy his appointments as well.

 

[jmdriver]

xrac- Thanks very much for the links, they will prove invaluable in the process.

Bobson- Can elaborate on how an agent buys appointments with an insurance company?

Basically, if anyone can tell me the process for purchasing a P&C book of business without holding any current appointments, I think I'll have the information I'm seeking.

 

[Chkndinner14]

xrac- Thanks very much for the links, they will prove invaluable in the process.

Bobson- Can elaborate on how an agent buys appointments with an insurance company?

Basically, if anyone can tell me the process for purchasing a P&C book of business without holding any current appointments, I think I'll have the information I'm seeking.

You purchase the book of business contingent upon appointment with the current carriers. You seek pre-approval from the carriers. No approval, no purchase.

I also recommend you gain some experience before jumping in. Selling is different than owning. Underwriting is different than sales.

Not sure of your area, but good books of business are not easy to land. If you owned a book of business, you want to sell to the most qualified and financially strong person. Big agencies are around waiting with cash.

 

[jmdriver]

Thanks for the information Shepherd, it gives me a good idea of the additional challenge buying a book of business will be.
I'm in the Southern California area, and I have my eye on a book of business that I know the owner wants to get rid of. His operation is not exactly how I would want to run mine, and as such his retention is pretty low, but I figure I may be able to get it at a reasonable rate and attempt to salvage his clients.
I would love to gain some experience running an insurance agency, but how would one do that without joining a Farmers or some other franchise operation? The current job market wouldn't let me garner any valuable experience without going down that route.