Possibility Of Starting My Own P&C Brokerage

[Guest]

Hello forums,

I've been floating around reading all the useful and insightful information around and am curious about the possibility of starting my own P&C brokerage as soon as I'm finished with my licensing. Before some of you start this is not a "how do i start a brokerage?" question but more so a feasibility question where I hope people will help me think about future road blocks that i have not thought through yet. So here we go....

I have a lot of experience in new client acquisition and retention as my current occupation is B2B cold call sales. I also have a lot experience in recruiting and training of individuals to expand my business come that time. I am thinking about starting my own brokerage. Now most people will say after licensing, get a job working with a broker and learn. Aside from learning how to write up apps, product knowledge, and sales experience i don't see what the point of splitting commissions with someone else as I am already proficient at 2 of the 3 and learning PK is easy. My plan is to contract with a company like Superior Access, until i can establish my own direct appointments, and using my knowledge of client acquisition and direct marketing techniques build my book of business. I don't mind dropping $3000 on E&O. I plan to start by doing auto with friends and family just to learn how to write apps and develop a system, not as an intended source of income, before i start actually marketing to the general public. I plan to primarily target my markets directly and quote over the phone so i will be working from home. I know its not supposed to be easy so my question is what flaws do you see in my plan? Thanks!

-Raphael

 

[TheSalesWolf]

Raphael,

Be prepared to starve for at least 2 years. I'm not aware of any P&C agents that started independent selling only P&C, with 0 policies and are still in the business for 2 years.

You're making an average of $12 monthly on an Auto Insurance deal. TAKES A LOT OF AUTOS to add up any type of income.

LIFE, HEALTH 1st then cross sell P&C in my opinion.

 

[Guest]

How is it only $12/ month? Superior access is saying on average 15% on auto and I'm thinking about $800 for an annual policy at 15% is $120 an app + broker fees so i don't see how I can starve with minimal overhead doing a minimum of 5 apps a week. Please elaborate.

 

[TheSalesWolf]

$120 an app is $10 a month and where would you be getting a broker fee.?

Their average commission is not 15% also, more like 12%. Plus you don't get paid 12 months for an auto policy.

 

[Guest]

Ah makes sense if they are doing payments. Y would i not get paid on a 12 month policy if i write a 12 month policy? And don't most brokers charge a brokers fee? Thanks for the quick response

 

[JCK818]

What he was trying to say was dont make things harder on yourself. Yes you could possibly make a living (not the 1st year) selling just auto. Try to cross sell other stuff. I would dissagree though on the sell life and health first. In my opinion its much easier to get a P&C client then cross sell other products to them. You are going to get lot mor people that NEED auto insurance than Health insurance. DOn't let anyone discourage you, get a game plan and execute it!
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AND yes if you can, you do put broker fees

 

[Norwayguy]

My only comment to this post, Why do you think that other consumers including your friends and family have never talked to an experienced (And lets admit starting out you won't be experienced) Independent agent that has already put them in the most competitive carrier out their....Now you might be able to beat the price but what are you stripping from the coverage.

About Broker Fees....I think that is state and area dependent, I don't know if my state allows broker fees but I know I have never paid one on my home or auto insurance, I look for things like that on my coverages.

 

[FLInsa]

Hello forums,

I've been floating around reading all the useful and insightful information around and am curious about the possibility of starting my own P&C brokerage as soon as I'm finished with my licensing. Before some of you start this is not a "how do i start a brokerage?" question but more so a feasibility question where I hope people will help me think about future road blocks that i have not thought through yet. So here we go....

I have a lot of experience in new client acquisition and retention as my current occupation is B2B cold call sales. I also have a lot experience in recruiting and training of individuals to expand my business come that time. I am thinking about starting my own brokerage. Now most people will say after licensing, get a job working with a broker and learn. Aside from learning how to write up apps, product knowledge, and sales experience i don't see what the point of splitting commissions with someone else as I am already proficient at 2 of the 3 and learning PK is easy. My plan is to contract with a company like Superior Access, until i can establish my own direct appointments, and using my knowledge of client acquisition and direct marketing techniques build my book of business. I don't mind dropping $3000 on E&O. I plan to start by doing auto with friends and family just to learn how to write apps and develop a system, not as an intended source of income, before i start actually marketing to the general public. I plan to primarily target my markets directly and quote over the phone so i will be working from home. I know its not supposed to be easy so my question is what flaws do you see in my plan? Thanks!

-Raphael

There is so much that you don't know about the P&C business that it isn't even funny. And I don't say that to discourage you, but it is a fact. Sure, writing HO3 and auto policies are easy. But what will you do when that manufacturing plant calls in looking for P&C coverage? What coverages will you give them? What ISO forms will you be sure to look out for?

Or that small Restaurant...... are you giving them Assault & Battery coverage? Or how about that General Contractor guy, are giving him the correct Completed Operations coverage? and so on and so on....

My recommendation is find an agency to work for, learn the business, then invest your hard earned dollars because I would really hate to see you here in a year's time asking for help "I am struggling, what do I do!" like so many are doing today.

Good luck.

 

[Texasproducer]

When you join an agency do they typically have book ownership or does it just depend on the situation?

 

[Norwayguy]

There is so much that you don't know about the P&C business that it isn't even funny. And I don't say that to discourage you, but it is a fact. Sure, writing HO3 and auto policies are easy. But what will you do when that manufacturing plant calls in looking for P&C coverage? What coverages will you give them? What ISO forms will you be sure to look out for?

Or that small Restaurant...... are you giving them Assault & Battery coverage? Or how about that General Contractor guy, are giving him the correct Completed Operations coverage? and so on and so on....

My recommendation is find an agency to work for, learn the business, then invest your hard earned dollars because I would really hate to see you here in a year's time asking for help "I am struggling, what do I do!" like so many are doing today.

Good luck.

There are things that I desagree about with FLInsa but the above post is not one of them....To the OP, I am a L&H and Investment guy but even my little exposure to P&C would lead me to believe just as like in L&H great you passed the exam now you need to learn reality. I think you will do a disservice to yourself and your future clients if you don't at least research the possibilty of doing some sort of joint work with an established Agency or subagent whatever the P&C guys call it.