Input on Starting an Agency

[tominsurance]

Hello,

My son is graduating from college in May and is considering starting an agency and I wanted to help him get some feedback about some of the pros/cons of certain companies as well as maybe get some information on costs of starting an agency. A friend recommended this forum to me. He's interested in doing P&C, auto and home and maybe life as well.

If you were starting out as an agent today, would you start an independent agency or a captive one? Also, does anyone know anything about startup costs for different companies? He's still pretty early on in the process and with school and everything, isn't ready to talk to recruiters about it quite yet, so any information you guys could provide would be really helpful.

Thanks,
Tom

 

[ModernInsurance]

Tom,

It might be wise for your son to cut his teeth in sales (and more specifically, selling/servicing within the insurance field) under another agent/mentor first. This will pay dividends when it comes time for him to open his own.

If he likes it and decides to stay the course, I'd advise him to go independent - he'll have more than one market for various risks/products that way.

 

[Arnage150]

Try buying an existing agency. Starting a scratch agency with no experience is basically impossible.
The captives will train him better. The independents will pay more.

 

[Derrick]

Tom,

It might be wise for your son to cut his teeth in sales (and more specifically, selling/servicing within the insurance field) under another agent/mentor first. This will pay dividends when it comes time for him to open his own.

If he likes it and decides to stay the course, I'd advise him to go independent - he'll have more than one market for various risks/products that way.

I'd also like to add that as much as people on here are against captive agencies, myself included, it is indeed how I got a start in the industry and it does provide training and support in all aspects of insurance. Not saying it can't be done being independent, but I got my start from captive and as much as I despise the captive agency system, I don't think I'd be where I'm at today as an independent without it. Maybe it's just a mental thing, but I just can't imagine someone giving me an office with free reign fresh out of college, and me becoming successful.

 

[myfakename]

I started selling insurance when i was 22yo (commercial P&C).

There is only slightly better 0% chance that he could start an agency and be successful. He'd be much better off going to work as an producer for an ind agency.

 

[insurance1822]

Get him into a commercial agency as a producer or account manager. Give him 2 years then go IA. I wish I would have done that.

 

[Placementkid]

As a young person in this business who has afforded myself the opportunity to place business for a large agency in just under 3 years in the industry, I would highly recommend allowing him to get his feet wet working for an agency and let someone show him the ropes, not to mention they will probably pay for his license, schooling and CE for a few years.

Unless he has experience in the industry, running an agency is going to be very tough starting out. The hardest part will be getting appointments without any real success or current book to offer.

I think it's the goal of most people who come into this industry, to run their own agency, but with that come the many responsibilities that it requires. Meeting payroll, overhead and operating costs can be tough, unless you're running it from a home office, but even then it takes a while to get to the profitability side of things and grow your book.

Commercial lines is where the money is at, but that also requires a good service team and experience, which unfortunately this industry is lacking right now.

I don't want to sound like I'm discouraging anyone from coming into this industry, but it takes a lot to be successful in your early years.

 

[myfakename]

As a young person in this business who has afforded myself the opportunity to place business for a large agency in just under 3 years in the industry, I would highly recommend allowing him to get his feet wet working for an agency and let someone show him the ropes, not to mention they will probably pay for his license, schooling and CE for a few years.

Unless he has experience in the industry, running an agency is going to be very tough starting out. The hardest part will be getting appointments without any real success or current book to offer.

I think it's the goal of most people who come into this industry, to run their own agency, but with that come the many responsibilities that it requires. Meeting payroll, overhead and operating costs can be tough, unless you're running it from a home office, but even then it takes a while to get to the profitability side of things and grow your book.

Commercial lines is where the money is at, but that also requires a good service team and experience, which unfortunately this industry is lacking right now.

I don't want to sound like I'm discouraging anyone from coming into this industry, but it takes a lot to be successful in your early years.

Your son would be 0 appointments with any decent company. Not to mention a good company.

 

[blue_wynd]

Just want to pitch in like everyone here. Have your son go work at a local agency for a couple years then open his own.

 

[cgreene]

I spent 6 years working for two different captive companies. It was the best thing from a training standpoint and understanding where I wanted to go when I started my company 4 months ago.