January 16, 2009
An anonymous independent agent posted a responce to my comment: “My advice: if you want to work in sales, find a more lucrative profession.”
His experience:
I own an independent agency and my renewal premium is approximately 6 million, generating over $1 Million in commission annually. Your points may have some validity, but there are not many sales jobs that I’m aware of that provide: A)RENEWALS, B)GROWTH OPPORTUNITY, C)BUSINESS CONTINUATION
Please point out a sales job that in your mind would be as or more rewarding. Many of my friends are in real estate and financing, and they are busting their hump non-stop to keep bringing in new clients while I work on my tan at the golf club.
Yes, I have been in business almost 20 years. However, I started as a scratch agent with nothing. Sorry to come across as rude on my post, but your advice on finding a better sales job irritated me.
Here is my advice on how to grow your agency quickly, and closely mirrors my own experiences.
1)Start at a captive company, but make sure it’s one where you are salaried and not paid on a “loan.” You’ll learn the ins and outs of auto/home policies, and get good training on life/di/ltc sales.
2) Join NAIFA and be actively involved. Meet other successful agents and take some professional courses.
3) After you feel you have your feet solidly on the ground, start making the move to the independent world. Start your own agency, but don’t pick a name like “John Smith Insurance Agency.” Choose a name that you can create a brand around if you decide to get bigger or open franchise agencies.
4) Partner with an existing successful agency that has a good loss ratio and lots of carrier appointments. See if he will work out an arrangement to bring you on in return for a cut (10-15%). The agreement should call for his cut to reduce as your book grows. I had a break-point at $1 Mil, 2 Mil, etc… At $4 Million I could completely split on my own and owe him nothing. With enough good business on the books you’ll have no problem getting your own appointments.
5) Hire agents underneath you to sell and CSR’s to service clients.
How to get this big quick? Buy LOTS of leads when you start at the captive carrier. Most will co-op the cost of the leads or pay for them entirely. Keep these leads in your own database.
Once you are on the independent side, your odds of placing every piece of business you quote are around 9 out of 10. Work your existing leads as well as buy new ones. When you write new clients, make sure to send thank you’s, BDay cards, Christmas, etc… and don’t be afraid to ask for referrals. You should set a goal to get at least 1 referral out of every 2 new clients you write.
My average annual premium is about $1800 per year for auto/home, so to write $50,000 per month in new premium, you only need to write about one new client per day to hit that goal. You’ll also pickup life and commercial opportunities along the way.
If you’re working 8-10 hour days, you have 8-10 hours to find ONE PERSON to write. Not that difficult to avg 5-10 per week.
As you get bigger you should hire other agents that can use your agency name to write business. Offering them their own book at 15% cut like you had is a good starting point. Just be careful about who you hire.
I found this site accidentally the other day. The idea of finding a better sales job blows my mind and caused me to make a post.
Thanks for the input anonymous .. drop me a note if you’d like your agency link posted.
Who would you reccomend buying the leads from? Would you target P&C or Health?
Looking at starting my own agency in WI through a broker. No Ins. Sales but 20 years of outside B2B sales.
Thanks,
Randy
I’m fresh out of college and I come from a family of three active Farmer’s Insurance agents. I’m currently working as a producer under my father. What next few steps are entirely crucial for me? Also, how can I learn the quickest? I’m currently working under a roof off all three agencies, but feel as though I’m not learning enough as quickly as I’d like to. I’m extremely determined to build a rock-solid foundation of my own cliental as soon as possible.
Well, if your licensing and appointments are in order, I’d say there is nothing quite like experience. Get started meeting people and writing business. Sales is a numbers game, you quote a percentage of the people you meet, you sell a percentage of the customers you quote. You’ll need to figure out how to meet enough people.
Make sure you learn to use your father and brothers for what they have: experience and credibility. Some grey hair goes a long way in this business. Remember, a split of some commission is better than 100% of no commission
As a captive or semi-captive agent, an important concept I learned when I was new was this:
Sell policies your companies want to you to sell, don’t chase business your companies don’t want. I wasted alot of time trying to write business my companies where not interested in.
Next, learn good business practices from the get go. Insurance polices are legal contracts; if your paperwork is not spot on, you’re flirting with trouble. Do it right and don’t cut corners. I’ve never met a 30 year agent with sloppy paperwork.
Finally, follow good, successful (and positive) people around and see what they’re doing. After you’ve seen successful people do their thing, don’t be afraid to incorporate what works for you and make it your style. Be creative in your approaches, use what works and discard what doesn’t. Find your own groove in marketing and sales.
Good luck, and take some joy in your work.
Add to all the above the fact that most Americans no longer use an independent insurance agent. Think about yourself and the last time you took out a car insurance policy, did you use the internet? I can guarantee that that gecko and his friends are not handing out commission checks to your local independent insurance agent. The independent local insurance agent is dead, he might still have a few years, but these are the lean years as those people who are not internet savvy catch up to the curve or die off. One of the largest concerns that i see for the independent agent is the fact that much of their business is targeted at the young family. The age group and market of the young family today are of people who are very well acquainted with the internet, according to amazon 68% of married couples ages 18 - 35 who make between $35,000 and $65,000 annually have purchased a product or service online in the last 24 months. This is the same bread and butter personal market that insurance agents have relied on for years. Add to this the move of small business to use insurance from their professional organizations and what you really have is a recipe for a doomed career. If you don’t believe that an online agency could provide the same service for a better price and that it will not hurt the income of the local insurance agent, maybe you should go talk to your local travel agent. If you can find one. The same move happened sooner in travel agency because of the industry being less regulated, however the same 10 year collapse will occur with insurance and has already started to some degree.
I personally believe that most people that are within 5 years of retirement should be good staying in this industry. If you are farther off from retirement than that i would suggest you take a serious look at your marketable skills. There will soon come a time when your 20th century sales skills will become as antiquated as those Zig Ziegler tapes and YES YOU CAN SELL books. If your only marketable skill is selling you might be out there with the car salesmen, the real estate agents, and the travel agents, knocking door to door trying to sell a vacuum cleaner.
Thanks Badvegan.
It’s funny, some colleagues of mine were discussing how the on-line insurance companies have flat-lined; Progressive hasn’t grown premium in years. GEICO is about to hit their peak. Other companies have managed to expand by moving into more and more states. At this point, Progressive & GEICO are SO desperate to write premium, they’re moving into Massachusetts (that’s DESPERATE! (and really stupid)).
If you’re looking for property coverage or commercial insurance, good luck finding it online. Why? Because insurance companies need to SEE what they’re insuring. Thet need boots on the ground, and few companies have developed a reliable method of field underwriting risks without using agents.
Last thing: the 18-35 age group? Can’t drive worth a squat, GEICO is welcome to them. Call an agency when you’re 40 and are done having accidents
exactly. online services not very good in underwriting and placing risk.. underwriting is too complicated, with too much information required which is specific to type of company being insured. do you think the questions carrier is going to ask will be the same with a food manufacturer compared to a contractor. do you think the insured has much of an idea as too what an insurer needs in order to underwrite a specific risk. i think not. long live human interaction, which is required in underwriting risk, provideing coverages, and saving people money, especially as it pertains to the business owner. people with expertise can explain how changing deductables can affect rates, or that one can tweek with co insurance requirements which will also affect rates. or how much liability is required with regards to the state you live in. or that liability losses cannot affect premium increases where prop losses do. or that insurers would rather pay out nuisance claims as opposed to defending in order to save money, which can effect. you think a csr for geico is going to explain this, and or save you money. my agent always ends up saving me money because she knows what she is doing, and can provide me specific benefits to suit my needs
also remember a broker represents the clients interest, a company csr is rep ing companies interest…. ie. broker saves you money!
To badvegan …
Your points are all focused on Personal Insurance and possiblely Term Life Insurance.
Commercial Insurance is virtually impossible for the lay person to purchase themselves. The complexity and options require an agent’s involvement to ensure the business is properly covered and getting the best value(price).
Your simple demographic references fail to recognize the market that successful brokers target. Those of us that have succeeded in this industry definately are not spending our time pursueing young families for their personal insurance needs. We have moved well beyond that.
Do some more research.
Nicley said. B must just come out of college and thinks he/she knows something about business. I Had a problem with a claim that my agent fixed right away. If I had to deal with someone from the internet they would still have me chasing my tail with no results.
Hello. Ran across your post while doing some internet surfing. I am a very experienced and successful high tech sales guy that is seriously thinking of making a change into the insurance business. I have good sales skills, people skills, drive, and my strength is as a hunter.
My goal is to get to about $100,000 in 2 years. Is that realistic? I am thinking of initially hanging my hat with Farmers or State Farm for starters. Thoughts? I was very interested in your articles especially for buying a lead list. I am very excited to get into this business and even tho I have a solid track record I would be a rookie in this business and just trying to learn from the good ones. Thanks.
Chip
The advice in the initial post all makes very good sense to me…. and was refreshing for me to read. I am in my 4th year as a captive insurance agent, and I will say it’s been a rollercoaster ride. I started with a senior agent, but started my own agency last May after a monetary dispute. As my income increased, so did my rent. I looked around and found he was much higher than any other commercial lease per square foot. He was also making a $13,000 bonus off my production per quarter. So I had to ge tout of there and do my own thing.
When I think of independent agents, I think of the two major players in my community. They are very lax, and could care less about bringing in new business or going the extra step for new clients. This tells me that they are either tired as far as their career goes, or they make so much money off of their current book that they don’t need to bust their butts to bring on a lot of new business. I have looked into the independent world, but I don’t think I’m quite ready for that just yet. My book should be over a million by June 2012 if I can keep up the pace. That’s when the bonuses kick in for the company I represent. I do notice a lot of younger people coming in and saying they want to start selling insurance. I always ask them why. And they all say because they want to make good money. I’m not a flawless agent, I’ve made many mistakes, and missed out on a lot of opportunities due to my own inabilities. I was making $65K operating a machine in a factory. I knew I was destined to deal with people for a living, so I took the commission only structure of an insurance agent and dove in head first. The first year I earned $44K, and was questioning myself as to why I left the factory, a 7 and 3 yr old at home, and my wife working full time. After much contemplation, I knew I had to start achieving more each and every day. I looked at a few ways to increase my activity and also ways to close bigger sales which would boost production. The end of my second year I almost doubled my income at $87K. that’s when I realized how lucky I am to have the opportunities I have. The end of my third year I attained my personal goal of earning a 6 figure income (which now I know… income should never be a goal of anyone). My wife quit her job in April, and now works in the office with me. I will argue the point regarding how everyone now purchases their insurance online. I purchase leads to supplement quoting activity, and go head to head with Geico & Progressive each and every day. They shave your liability limits every chance they get. All it takes is a little client education - then they understand the value of a person who looks out for their best interest.
Hello, I am considering shifting my career into insurance. I own a Flooring business with a showroom and 20 employees. With construction slow and profit margins non existint I am looking into insurance sales. Does anyone have a reccomendation as to which insurance I should focus on? I am 30 years old and feel I do not have enough grey hairs to sell life. I feel like group health or commercial (comp and gl) would be best. However I don’t have experience selling insurance and am also considering starting with auto and home just to get my feet wet. Any reccomendations? Thanks in advance!
Tom… I would recommend using personal lines home & auto to start off with. people have to have it… so why not have it through you? once you get your home & auto rockin’ & rollin’ - then you can look into other areas, while still earning income on the home & auto
I have been in business now since August 2010 in Plano, Tx. I originally worked for a captive agency and then managed a Independent agency for 6 years. I would recommend Independent agency over captive any day. I have the carriers to Insure anything that is needed and Choices which is huge considering im not limited to one company. Focus on your bread and butter which is Auto/Home then get Commercial policies. Everyone has to find there own niche. Hope this helps out someone!
This was a very encouraging post and I just want to thank you for the helpful info. you provided! - Michelle
Hi,
i want to get into insurance broking, say if i sell car insurance i want to know how much cheaper deals i can bring for my clients from insurance companies? would it be way cheaper than the price my client would get directly from a company?
Thinking of purchasing an agency in my local town. My wife has been an agent/csr for 18 years at a large independent agency in the same town. Can anyone give my a successful ratio of csr to either policy count or annual premium dollar for personal lines. The information would be appreciated and helpful.
Thanks
I have been a “captive” agent since 2006. I loved haning my hat there as I received a great deal of training and support. Now I feel I am ready to become an independent agent. Reading through this post gave me a great deal of information which confirms my decision. So thank you to all who posted.
Like the post above stated, I am going to an established agent who has over 100 carrier appointments. My fees are 10% with a $1000 per month cap and minimal E&O and technology expenses.
Now is the best time to get into insurance sales. There are many reasons for this:
1. There are many captive agents that have decades of experience (and large books of busines) who are ready to retire. Someone needs to be there to catch the windfall of clients who now suddenly find themselves shopping around.
2. Risk factors and ratings are becoming more and more complex, someone needs to be there to assist in the clients understanding and recommend the correct coverages. An online computer program cannot do this for them.
3. Forces in the economy drive people to personal lines agents to assist them in getting the best value for their insurance dollar. People want to be assured that they have the best mix of coverage, service and price.
Good luck to all currently in or considering a career in insurance sales!
I’m glad I ran across this blog. I’ve been liscensed in all lines since 2000. I stopped selling insurance in 02, because of the unbelievable amounts of money I was making in the mortgage game. I’m now back in the insurance industry and must say, I’m a bit sceptical. - Currently my primary focus in Medicare products with a crosssell of life products. I’m eager to make some real money, to supplement that lost mortgage income. I am very optimistic and driven but again…sceptical…and afraid of failure. - This blog has surely encouraged me a bit. Already I see things that I must do differently…such as; not fearing cold calling. I appreciate the responses and look forward to trying different approaching as soon as tomorrow morning. — Thank you all….
I am currently in the finance business and is looking to start an independent insurance agency. I am licensed to sell p&c and life and health. I am very accomplished in the finance business and my strongest skill in this business is my insurance sales. I want to start with auto/home first. I live in AL. I have a lot of contacts with car dealerships, banks, and realtors through my current business. I am so scared of failure. Has anyone started an independent agency in the last year or two that can give me some advice.
I’ve been working for an agent for 4 years as a CSR, licensed in P&C for 3 and working on my life license now. I don’t know what my next step should be. Whether I should become a producer under the agent or become a captive agent. I’m not making enough money doing what I am, I write ALL the personal lines out of this office, the agent writes life and commercial. I don’t get any of the commission, just an hourly wage…
I am a captive agent and am looking to increase my activity to educate and write more business… Any suggestions for what I can do to “fill the top of my lead funnel”. Also, I am looking to hire a producer.. Any thoughts on how to hire somebody on commission only (sales focused). Thanks