New P&C Agent question

[[email protected]]

I own a small Mortgage Company in Texas. We are looking to expand into the Property and Casualty space. I've done the work to set us up for licensing in Texas. We now are looking for the best route to establish either placements or possibly a partnership with an existing independent agent. Does anyone have any advice regarding the best route for our firm to take. We've talked to a couple of agents regarding a possible partnership, however, I'd like some advice from some professionals. OUr end goal is to own an independent agency of our own. Thanks for your help!

 

[djs]

So let me make sure I understand. You want me to give you the best advice of how you can put me out of business?

I make it a point to refer my clients who need a mortgage to a mortgage broker. I expect the same courtesy when someone needs insurance coverage.

That said, my advice if you really want to enter the insurance world is to hire a licensed agent to work for you. Insurance is a numbers game, and unless you have the opportunity to close at least 10 homes a month for insurance, you'll find the expenses outweigh the benefit. By having someone focused on insurance, you can do this, and more.

Dan

 

[[email protected]]

Thanks for the advice. I have considered that option as well. We typically do more than 10 loans in a month, so I'm glad those numbers workout.

From our perspective, we are attempting to do the same thing that many insurance professionals have the opportunity to do, which is cross sell different financial services products to our existing client base. I've never closed a referral from a p&c insurance partner, so that was never a consideration. If I had someone like yourself referring business to me, I might have a different perspective.

Thank you again for the info.

 

[bobson]

So let me make sure I understand. You want me to give you the best advice of how you can put me out of business?

I make it a point to refer my clients who need a mortgage to a mortgage broker. I expect the same courtesy when someone needs insurance coverage.

That said, my advice if you really want to enter the insurance world is to hire a licensed agent to work for you. Insurance is a numbers game, and unless you have the opportunity to close at least 10 homes a month for insurance, you'll find the expenses outweigh the benefit. By having someone focused on insurance, you can do this, and more.

Dan

But you have to make sure you are introducing each other, the insurance agent to the mortgage clients and vice versa. In my area we have multiple insurance agencies that also sell real estate. We still get lots of calls for insurance from people that buy houses from the agencies that handle real estate and insurance. I don't get it!

But then again we only have about 2.0 policies per household. We could do a lot better than that if we tried!

 

[djs]

Thanks for the advice. I have considered that option as well. We typically do more than 10 loans in a month, so I'm glad those numbers workout.

From our perspective, we are attempting to do the same thing that many insurance professionals have the opportunity to do, which is cross sell different financial services products to our existing client base. I've never closed a referral from a p&c insurance partner, so that was never a consideration. If I had someone like yourself referring business to me, I might have a different perspective.

Thank you again for the info.

My mortgage brokers send me a lot more clients than I send them. I then send a lot more clients to electricians / plumbers / roofers / etc, then they send me. The electrician in turn sends a client to a realtor, who sends them to the mortgage guy, who sends them to me, and on and on.

If you look for referrals to be exactly even, you'll kill yourself.

That said, if you do 10 loans a month, you'll write 4-5 policies, depending on your clients. Most will have insurance when they come to you, unless it's a new house purchase. So you'll make $800 a month on insurance, but spend $300 a month on E&O, have to setup an agency management system, get appointed, etc. It is a touchpoint for your clients, so I understand the attraction, but at the same time, few insurance agents will even attempt to steal your clients. If they do, they should be shot. Do you really make enough to make it worth the hassle?

I have no problem with realtors getting into the insurance business. In fact, I encourage it. I've just learned that it is a full time job, not something you add in as a side project, and still do it well. It's kinda like being in real estate part time, many try, very few succeed.

Dan

 

[Insurance Phoenix]

I say if you are successful, pass that knowledge on to others. There are rewards in life for that too.