Please Help with Suggestions

[nonstandard4me]

I have been independent a little over a year. Started captive and learned alot but was ultimately so non competitive that I saw the light and fled. Got with a cluster out of the gate but found out I like the nonstandard auto business the best (don't judge). My question is this, since the NS scene is so much easier to get direct with and I write so little preferred business , am I getting screwed by being with a group.

Don't get me wrong I do get a lot out of the support but it does make it harder to pick up carriers and the bar to entry is lower so what is better. For the record I have an office, so not one of the work from home guys ( no offense L&H people). I have some middle market and a very little preferred business that I do not want to throw to the breeze. But ultimately I want to do what is best for me and my family. 2 kiddos.

Thoughts?

Am I nuts?

Possibly over thinking?

 

[insurance1822]

1.) Who are your non standard carriers

2.) How much new business do you write w/ each

3.) How much premium volume do you have w/ each

4.) What's the split going to your group

5.) Are you currently getting profit sharing as a result of the group

6.) What's the premium volume w/ each of the above referenced carriers to hit profit sharing on your own

8.) What's your loss ratio w/ each carrier

9.) What's the group's loss ratio w/ each carrier

10.) Are you getting new business quarterly over-ride commissions as a result of being w/ the group

Because you've only been in this <1 year it's difficult to measure the % increase in new business you're writing each year to trend future growth. Provide some of these answers & I can do my best to help you.

 

[nonstandard4me]

My main carriers for NS business are
1. Dairyland
2. Titan
3. Kemper Specialty
4. Progressive

I've had Progressive the longest but much prefer others.

Book is looking at aprox 330k total (not stellar but at least ok) give or take. I would armchair that 70% of that is NS.

split is 80/20

Average premium is about 1000 if annualized. (most are 6 mo policies).

I do not know the profit sharing structure on the NS side if on own.

Loss ratios are good on my end except for 1 (Which is horrible due to a big claim and low premium with carrier).
I do not know the groups ratio.

Realistically, I know that I am prob too fresh to really have good data on any of this and I do not want to lose the small preferred business percentage I have as well. I just feel like the odd duck out because the groups focus is preferred and the interest is low in dealing with non standard issues.

Hope that's a little more info.

 

[Theinsuranceguys]

What state are you located in?

 

[ncagent83]

I have been independent a little over a year. Started captive and learned alot but was ultimately so non competitive that I saw the light and fled. Got with a cluster out of the gate but found out I like the nonstandard auto business the best (don't judge). My question is this, since the NS scene is so much easier to get direct with and I write so little preferred business , am I getting screwed by being with a group.

Don't get me wrong I do get a lot out of the support but it does make it harder to pick up carriers and the bar to entry is lower so what is better. For the record I have an office, so not one of the work from home guys ( no offense L&H people). I have some middle market and a very little preferred business that I do not want to throw to the breeze. But ultimately I want to do what is best for me and my family. 2 kiddos.

Thoughts?

Am I nuts?

Possibly over thinking?

Why would you want to go after NS? In my experience, they don't pay on time, you always have to chase them down to pay, they don't care about coverages, and they'll shop and switch on you over a few bucks. Premium is good, but retention and loss experience suck. Again ... in my experience.

 

[insurance1822]

Questions you didn't answer..


2.) How much new business do you write w/ EACH carrier per year

3.) How much premium volume do you have w/ EACH carrier

5.) Are you currently getting profit sharing as a result of the group & if so, what's the group's split on the bonus payouts

10.) Are you getting new business quarterly over-ride commissions as a result of being w/ the group

There's nothing wrong w/ being new & fresh. You NEED to start understanding these metrics so you can make the most informed decisions. It would be like flying a plane without instrumentation. You can start plotting trends once you have this information.

1.) What profit sharing now are you getting (if any)

2.) Is the group's historic loss ratio where it needs to be

3.) If you're not at profit sharing w/ the carriers you're writing with on your own as we speak, how long will it take (based off how much you write) to get there..

4.) ^^ How much bonus would you be forgoing until you got there (assuming you're getting bonus from the group..)

5.) Are you getting new business override commission that's maybe making your standard 80/20 more like 90/10 or 95/5?

6.) Based off the knowledge of the total size of your book...I'm thinking that your premium volume w/ each carrier is just way too low to start trending realistic profit sharing goals if you were on your own. You need to be aware of frequency & if what kind of non standard business you have. If you have 50/100+ multiple car NS business as a majority % of your book, that's better than having state minimum jose rodriguez business which won't retain & won't be profitable.

There are some guys that argue FOR having non standard business & IMO they're either people who CAN'T get preferred business because they're lazy OR they inherited a big NS book that's already cash flowing. All things held equal you DO NOT want to be in the NS business if/when you compared that to having a preferred book.

The other factor is you may be writing non standard bum business now, but who knows what you'll be writing a few years from now. If you can get into the preferred markets, you may regret leaving the group.

My concern is that you don't have a solid understanding of these fundamentals & all that means is I wouldn't jump on anything yet. Understand how all these factors should be coming together in your decision making. You also need to pay attention to your retention because you'll end up spitting in the wind VERY SOON w/ a non standard book.

 

[nonstandard4me]

Thank you for the feedback. I do need to get better at the metrics. I didn't have to worry about as much at captive because there was not much I could do about it. Not an excuse though I should know more. I do enjoy the NS business. I do write a fair amount of mobile homes with them so I try to get a bastardized package business. Haha.

I agree that I should prob stay as it is too soon to even know anything. And preferred will or can pick up. There is not a good NS writer in the area though so I don't or at least sort of hate to drop it. Thanks for a little perspective.

For liking NS the ghetto is just more fun. If only it were more profitable. Point taken.

 

[indienoise]

Ins1822 and i have gone around on this subject a couple times. Now, I'm certainly not going to argue the fact that preferred business is easier and more profitable in the long run. If you have to choose only one or the other, anybody would rather have a preferred book.
However, local markets sometimes dictate a large amount of nonstandard business, and if you know the right type of nonstandard business to go after, the retention can be quite good, and you're less likely to experience myriad problems. But that's not really the point of this thread. Besides, if you actually enjoy NS, you've probably already figured it out.

That aside, i agree you're probably too new with the group to make an informed decision. Since your bed was made once you signed the contract anyway, may as well ride it out so you make the best decision and not jump to one emotionally.

 

[ZappMan]

.... My question is this, since the NS scene is so much easier to get direct with and I write so little preferred business , am I getting screwed by being with a group.

The bigger problem will be retention. Those NS'rs don't stay in that pool forever. Can you rewrite them in time when they qualify?