State Farm Interview!

[Josh]

2.5 yrs commercial and work comp..solid book and good salary..hence the reason im searching everything i can

I was asking xrac, but that's good information.

I like Allstate's model better between the two because you have ownership, but they're both captive shops.

 

[xrac]

I was asking xrac, but that's good information.

I like Allstate's model better between the two because you have ownership, but they're both captive shops.

What does P&C experience have to do with understanding if a contract is attractive or not? At one time SF looked very attractive to me until I began to understand that the contract my friend who is an SF agent had wasn't the contract that a new agent would receive.

 

[Josh]

What does P&C experience have to do with understanding if a contract is attractive or not? At one time SF looked very attractive to me until I began to understand that the contract my friend who is an SF agent had wasn't the contract that a new agent would receive.

You said:

It doesn't matter if you have spent thousands to build their business and are in debt. I think it doesn't make sense to spend thousands for a deal like that.

There are a number of ways an agent can fail out of the business after spending thousands and being in debt in the P&C world (or any other for that matter). That's hardly unique to SF or an automatic flag to say no dice on a P&C contract. The fact that they already have a bunch of the market and are a captive shop that expects you to continue to produce even if their rates aren't competitive is much more alarming to me.

So answer your question directly, if you don't have P&C experience and aren't aware of what's out there, it may not give you enough of a picture to be able to fairly say whether or not a contract is attractive relative to the industry. I'm not trying to give you a hard time, but I think perspective is important.

 

[xrac]

You said:



There are a number of ways an agent can fail out of the business after spending thousands and being in debt in the P&C world (or any other for that matter). That's hardly unique to SF or an automatic flag to say no dice on a P&C contract. The fact that they already have a bunch of the market and are a captive shop that expects you to continue to produce even if their rates aren't competitive is much more alarming to me.

So answer your question directly, if you don't have P&C experience and aren't aware of what's out there, it may not give you enough of a picture to be able to fairly say whether or not a contract is attractive relative to the industry. I'm not trying to give you a hard time, but I think perspective is important.

With Allstates you at least can sell your book of business. If you try and fail you still can walk away with something even if it is not much compared to what you spend. However with SF you have nothing. You have spent thousands on an office, lease, and marketing and at the end of the year under the TICA you could walk away with nothing and you do not have control of the decision. I may not have P&C experience but I have 19 years of business experience and have started 3 businesses. I personally find that risk unacceptable.

 

[Josh]

With Allstates you at least can sell your book of business. If you try and fail you still can walk away with something even if it is not much compared to what you spend. However with SF you have nothing. You have spent thousands on an office, lease, and marketing and at the end of the year under the TICA you could walk away with nothing and you do not have control of the decision. I may not have P&C experience but I have 19 years of business experience and have started 3 businesses. I personally find that risk unacceptable.

Any business comes with that risk.

 

[moonlightandmargaritas]

I like Allstate's model better between the two because you have ownership, but they're both captive shops.

Good point. Important to realize that your buyer has to be approved by Allstate (of course), and they've been known to be a little persnickety about it...

 

[xrac]

Any business comes with that risk.

Any business carries a risk of failure but at least in most situations it is the entrepreneur who is the one who decides when to pull the plug. However it seems as a TICA you have all the risk but no ownership or control.

 

[Josh]

Any business carries a risk of failure but at least in most situations it is the entrepreneur who is the one who decides when to pull the plug. However it seems as a TICA you have all the risk but no ownership or control.

You also have guaranteed income with the State Farm book. If you have something personal against State Farm then that's fine, but at it's face this isn't necessarily a bad deal. They're basically saying "here is a branch of our company to run, if you do well, we'll let you have it".

 

[beardshear]

One big bonus with State Farm is that they provide very good training, the training program goes for 8 - 9 months with good pay.

 

[xrac]

You also have guaranteed income with the State Farm book. If you have something personal against State Farm then that's fine, but at it's face this isn't necessarily a bad deal. They're basically saying "here is a branch of our company to run, if you do well, we'll let you have it".

I have nothing against SF. SF in many ways is a fine company. People use to have to fight for the chance to become an agent with them but the contract has changed. I just think the risk reward ratio is too skewed the company's direction and that many new TICA' s are going in looking at the success of older agents not understanding how drastically the contract has changed. At one time if you became an SF agent you were almost guaranteed to retire either very well off or possibly wealthy.