Advice about going Independent

[Txmade99]

Need some advice on whether it's worth going independent selling personal lines auto and home in Texas. My background is State Farm working in the underwriting department and then sold as a Sales Agent for 4 years for them as well.

I looked into a couple of Imo's and wasn't attracted to the ones with no binding authority and also didn't like the ones that charge $500 monthly fees. One representative with an imo informed me that it would be hard to get appointed carrier access in the state of TX for agents starting out due to not only risk but also that these carriers are preferring to keep the money to their selves.

Is it even worth it to break into P&C at this time right now in TX? And if so can anybody recommend an IMO? It just seems like more is required to break in than Life insurance.

 

[marindependent]

It just seems like more is required to break in than Life insurance.

You got that right.

My background is State Farm working in the underwriting department and then sold as a Sales Agent for 4 years for them as well.

That is impressive and will help you.

didn't like the ones that charge $500 monthly fees.

Yep and there are going to be a whole lot more costs and fees associated with starting a indy PC shop. If $500 scares you - I would stay away.

would be hard to get appointed carrier access in the state of TX for agents starting out

Very Likely true. Not a TX guy - but that does not surprise me.

Question for you - which indy insurers would you like to be selling in Texas right now? Who is writing?

Is it even worth it to break into P&C at this time right now in TX?

More than likely its worth it -but the time and cost horizon might be a ten year return time frame. And there is a significant chance of failure / abandonment.

Do you know any independent agencies near you? Someone in Texas that you trust? It might make sense to go work with an Indy first, to get the lay of the land on how its different from SF.

 

[Txmade99]

After seeing how much I made for State Farm, this made me decide never sell for someone else again. I saved up some money and quit my job to go independent, I'm mainly doing Life now. But I didn't want to let the knowledge and experience in P&C go to waste.

I see Texas is an expensive state to do business. I contacted Siaa and they wanted $15 grand. I'm pretty sure it's worth it but not prepared to do that right now. The second imo wanted the $500 monthly fee and the one I did like wanted $1500 up front plus a monthly fee of $200 but they were the ones that told me it's super hard right now to get new Texas agents appointed. I appreciated their honesty instead of taking my money. What I didn't understand is why a bigger imo like Siaa had the same knock off carriers as the cheaper Imo's but charging more. But I did hear from agents that they had no problem getting carrier appointments thru Siaa.

I didn't think about working with an Indy agent, sounds like the best option. I will look into that or just stick to final expense sales and hustle until I get comfortable enough to pay 15 grand.

 

[marindependent]

You will need a business plan before you committ to spending $15K.
Keep in mind that getting an appointment and having access to an insurer is not the same thing. There are lots of ways to write with some insurers and not have an appointment. Sometimes in the begining that is a better option. Everyone assumes that they will have ALL this business to write and need to get direct access, and often in the begining that is not at all true.

Id either consider working in an indy agent or at least partnering with one to see how much business you can produce first. My first two years as an independent agent resulted in very few sales and it would have been a total waste of money to get direct appointments.

Lastly - not a commercial guy here - but personal and commercial access - very very very different.

 

[Txmade99]

Did you have money to buy leads in the beginning? The agent I worked for at State Farm completely depended on buying leads since he didn't do much networking or events. I was able to make quota off those bought leads. I figured I would do the same thing starting out. But then again, that could be a terrible idea and waste of money since I don't know how competitive the prices are from companies like Nationwide, Safeco, Elephant or Infinity and etc. It seems like some of these companies use Progressive but I think it may be some stipulations with them.

 

[Allen Trent]

After seeing how much I made for State Farm, this made me decide never sell for someone else again

Not saying you shouldn't pursue being an agent or an independent agent, but can you explain what you mean by "how much you made for someone else"

Unless you prospected strangers(not cross sold current clients or got agency leads) or you paid all the overhead of the agency building, labor & taxes & marketing costs, you may not have "made them any money". I don't think a lot of staff or sub producers fully grasp the overhead involved. Was just with an agent today that has about 50k in monthly overhead for location, staff wages, taxes, etc.......every single month.

So, between your pay, the lead cost & overhead, the agency principal may need to keep that client for several years before they experience any profit on the account as the commission on the policy may not cover all the upfront & servicing costs. Then, add in that the client could have large claims that cause the agent to lose out on profitability bonus, it really could be negative.

insurance is a get rich slow proposition & many people never get to the get rich part if they either fizzle out from lack of prospecting, lack of sales & overhead & government payroll/quarterly taxes are greater than revenue on the ride up to riches

 

[Markthebroker]

Do you know any independent agencies near you? Someone in Texas that you trust? It might make sense to go work with an Indy first, to get the lay of the land on how its different from SF.

This is good advice, and exactly what I would suggest.

 

[marindependent]

Did you have money to buy leads in the beginning?

Yes. But I was very careful doing this, esp in the begining. In fact in the begining the number insurance product that I ended up selling was something that was not even on my radar when I started.

The agent I worked for at State Farm completely depended on buying leads

Yep. That strategy likely is going to work better for a SF guy than a Indy for reasons that are not easy to explain.

Listen its tough to buy leads until you know what you edge or sweet spot is in this business. Its not at all clear to me that a purchased lead are any better than ten names out of a phone book.

I have known several agents that came into this business thinking that they could "hire people" to generate business and they would simply write it and collect the commission. The reality is that almost any lead that you do not generate from a referral, strategic partner, or your own website, is subpar. And its just a race to get to 50%/60% self generated leads in P&C, IMO.

Some guys like @Markthebroker and @Hawaii Agent and @Al3x Lee are nearing 90%.

Think of it as launching a fully loaded B52 from a short aircraft carrier.

 

[Allen Trent]

Some guys like @Markthebroker and @Hawaii Agent and @Al3x Lee are nearing 90%.

You are underestimating markthebroker, he/her is closer to 120%

 

[SF_Anon]

His right hand is 120% larger than his left hand, yes.