Insurance Agent Forum

[learningtheropes]

I am a FL Licensed General Lines 220 Agent. I also just received my Agency License and in the process of securing E&O Coverage then carriers. For the last 10 years and currently, I'm a Regional Account Manager for an Indirect Lender. We purchase motor vehicle retail installment contracts from the point of sale for all credit type customers from both Franchised and Independent Motor Vehicle Dealers. I have clients throughout the state of Florida.
Insurance is required on any vehicle financed (based on value and lien holder requirements in regards to comp & collision). Since I deal directly with the finance managers at automotive dealerships a common complaint that I hear from them is they all have their funding held up or deals turn down by lenders due to no insurance on at least 10% of their monthly business. I intend on focusing on this niche income opportunity and my goal is to start on a very, very small budget. I plan to market thru my current commercial clients to reach their consumers. If done correctly there could be huge potential for multiple commercial and personal lines.
Due to what may be conceived as "conflict of interest" with my current employer I have to structure my plan so that my only visible involvement would be my direct marketing to my clients and their clients. As profitable as the insurance industry is it would take many years to build it up to my current income.
I'm trying to figure out a way to possibly have all service work, customer service, agents, etc. outsourced to possibly captive or independent insurance agents. I would like to be able to track and keep a data on all customers whom I initiated the original relationship between the customer and the agency.
Basically, I have already purchased the domain for the website and I plan to design it so that consumers can get quotes from multiple carriers, purchase the policy and print the necessary forms and binder. Also, I want to set up operations to remain paperless and increase efficiency in all departments.
I believe that I should be able to generate a hundred or more auto policies per month pretty quickly then build up to several hundred auto policies per month. With this volume I should be able to sell multiple product lines to a good percentage of the customers that purchased an auto policy.
As business grows and more product lines become available, those additional product lines would be added to the site so that it would be a full service site offering all product lines.
The main thing is that I want this venture to have the best customer service, user friendly website which offers a real value to the consumers while allowing policies to be verified online to reduce incoming phone calls from lien holders, dealers and etc to verify policies.
Does this sound like a possibility or an overzealous idea? Don't hold back the punches, I'm a big boy I can handle it. I would prefer an honest opinion.

[djs]

It's amazed me that people don't focus on this more. I think you misunderstand the issue a bit, but in general, it is a somewhat workable plan.

The big problems you'll run into:
- Funding is not held up because of the lack of ability to get insurance. It's usually the lack of $$$ to get insurance. You haven't solved this problem.
- The cancellation rate on policies from used car dealers is VERY high. Make sure you build this into the plan.
- The loss ratio is higher then the cancellation rate. A lot of agents don't want to touch this, some carriers will slap your hand.
- Most carriers will require a physical inspection of the vehicle. You need to have a way to deal with this. The inspection must usually be done by the agent, not by the dealer.
- Service work on this type of business is very steep.
- Cross selling is limited.

Also, you're opportunity to get into new car dealers is much more limited than used car dealers. New car dealers sell through their 'name brand' insurance.

You'll be amazed at how many car dealers hold their hand out for your commission check for the referral.

There were sites that did very similar things for homeowners insurance back in the real estate boom. I don't think any of them have survived.

It is an ambitious plan, will cost a fair amount of money to implement, but if you go state wide and collect enough clients, it may work out. It's not a plan for 10 dealers selling 20 cars a month each. It will cost far to much to implement.

Dan

[learningtheropes]

Dan,

Thanks for your advice. I currently have over 200 franchised and independent car dealers that submit deals for financing to me each month. There are over 6000 independent dealers in Florida. I should be able to set up some type of lead/referral/pay per app received type of program with enough independent dealers alone to generate a considerable amount of policies.

I'm not the only lender that they use by no means. Like the insurance business my income is commissions only and is residual monthly.

My plan is to start small, possibly just targeting my clients then marketing to other dealers throughout Florida. As far as inspections go, wouldn't it be possible for me to set up something with approved vehicle inspectors (i.e. in Duval county they have Tire Kingdom which is an approved auto inspector for insurance agents) or do the carriers have different "rules/outlooks" on such an idea?

I guess I need to contact some local independent agents in my area and see if we can so some type of pass thru program whereas I generate the lead and we share in the commissions and that book that was generated via me.

Do you think independent agents would be interested in such a venture?