This Is My First Post -please Be Gentle

[DEGRI]

Hi, Folks:

Everyone seems to be very nice on this forum, so I am going to post my concern and hope that I don't get lambasted.

I am currently employed full-time at a large private company. My job is stultefyingly boring and I need out NOW! I used to sell health and life insurance several years ago, but when I took this stultefyingly boring job (my then husband had a cardiac issue and we really needed the health insurance), I made the mistake of letting my insurance licenses lapse to the point that I had to take the state exams all over again (you KNOW how much fun THAT was).

Anyway, I am newly licensed in P&C. I figured since my state REQUIRES auto and homeowners' insurance, it should be good bread and butter vs. life/health, which people tend to go without if they are facing a financial crunch.

MY QUESTION: In order for me to leave the job I am at, I need to know how long it may take me to earn an average of $600/week ($2,400/mo) to cover my burn rate at home. I am alone and don't have anyone else to help support me while I get up and running. I am very energetic, personable and have a sales personality. I have decided to remain independent, rather than captive, so that I can offer a variety of products to my potential clients.

Everyone tells me to leave a salaried job with benefits to go out and work on a 1099-basis is nuts. It may be nuts, but nothing is worse than sitting at my desk at work KNOWING that I am not realizing my full potential. I am just afraid to make the transition. I have abot $2k savings to rely on while I get up and running. A broker friend, who has a very large P&C business, has offered me a free desk/office and is willing to train me. I am dying to make the jump but am scared. All I need is to make $2,500 per month to survive and everything else on top of that is gravy. How long might this take based on auto and homeowners policies with some final expense policies thrown in there?

I know how to do the math, I am curious to how everyone is doing due to the current economic climate. If I hear "you're lucky to have a job" one more time, I'll scream...It simply instills fear in me when I am usually a fearless personality.

Of course, every MGA I have spoken to promises me the world and great leads. We know how that goes. The lead have usually been worked over, so I seldom use leads. I find my best sales are from word of mouth and my networking circles.

SO, SHOULD I MAKE THE JUMP IN A LEAP OF FAITH, or try selling part time (If I don't jump off my desk first. )

Thanks for the guidance.

DEGRI

 

[jlchan33]

I agree with everyone else - leaving a paying job that has benefits you need for a 1099 arrangment in the insurance world is nuts. I've done it before and regretted it before, despite being a young healthy person vs. someone who really needed health benefits.

All serious professional P&C jobs are salary+commission based. If your broker friend isn't offering you a salary, run for it.

In my experience, less than 1% of all independent agents ever clear the amount you've mentioned. And that's not even factoring in all the expenses associated with being in business for yourself such as buying your own liability insurance, maintaining what will be an overused car, buying leads, etc.

Final expense policies are very hard to sell because they're expensive and people can easily buy them online as oppose to obtaining them through an agent because the underwriting is a cinch.

If you feel unchallenged, why not go back to school or do insurance part-time rather than putting yourself through the stress of a 1099 arrangement?

The scenario you describe is not one in which you leap and the net appears, in my experience, unfortunately. :-)

Hi, Folks:

Everyone seems to be very nice on this forum, so I am going to post my concern and hope that I don't get lambasted.

I am currently employed full-time at a large private company. My job is stultefyingly boring and I need out NOW! I used to sell health and life insurance several years ago, but when I took this stultefyingly boring job (my then husband had a cardiac issue and we really needed the health insurance), I made the mistake of letting my insurance licenses lapse to the point that I had to take the state exams all over again (you KNOW how much fun THAT was).

Anyway, I am newly licensed in P&C. I figured since my state REQUIRES auto and homeowners' insurance, it should be good bread and butter vs. life/health, which people tend to go without if they are facing a financial crunch.

MY QUESTION: In order for me to leave the job I am at, I need to know how long it may take me to earn an average of $600/week ($2,400/mo) to cover my burn rate at home. I am alone and don't have anyone else to help support me while I get up and running. I am very energetic, personable and have a sales personality. I have decided to remain independent, rather than captive, so that I can offer a variety of products to my potential clients.

Everyone tells me to leave a salaried job with benefits to go out and work on a 1099-basis is nuts. It may be nuts, but nothing is worse than sitting at my desk at work KNOWING that I am not realizing my full potential. I am just afraid to make the transition. I have abot $2k savings to rely on while I get up and running. A broker friend, who has a very large P&C business, has offered me a free desk/office and is willing to train me. I am dying to make the jump but am scared. All I need is to make $2,500 per month to survive and everything else on top of that is gravy. How long might this take based on auto and homeowners policies with some final expense policies thrown in there?

I know how to do the math, I am curious to how everyone is doing due to the current economic climate. If I hear "you're lucky to have a job" one more time, I'll scream...It simply instills fear in me when I am usually a fearless personality.

Of course, every MGA I have spoken to promises me the world and great leads. We know how that goes. The lead have usually been worked over, so I seldom use leads. I find my best sales are from word of mouth and my networking circles.

SO, SHOULD I MAKE THE JUMP IN A LEAP OF FAITH, or try selling part time (If I don't jump off my desk first. )

Thanks for the guidance.

DEGRI

 

[FL P&C Broker]

All serious professional P&C jobs are salary+commission based. If your broker friend isn't offering you a salary, run for it.

Really? 1099 works great for our agency.

 

[DiegoInsGuy]

Really? 1099 works great for our agency.

For your agents are they doing mainly personal lines, and if so what is their split with you?

 

[Guest]

salaried insurance agents have no motivation

 

[djs]

I have no motivation... wish I was salaried some days
Look at the numbers, to clear 2500 a month, realize that you will have at least $1000 a month in expenses, so you need $3500 a month.

Initially, that means writing 35 policies, whether it is home or auto, just think in terms of 35 policies. At 3 policies per household (which is a bit high, but you can do it) means you find a new household 13 times a month, or 3 households a week.

After the first year, the renewals start coming in, so you can do about half of this in new business and use the renewals to stablize the income a bit.

Here's the problem. Writing 35 policies a month on your own is a challenge. Can be done, but it takes work, a lot of work. You have to market like mad, network with everyone, anytime you get a chance, and in general, be a phone-a-holic to get it done. You'll have 2-3 years non-stop to make it start to work.

Realistically, you need a way to support yourself for 6 months to make the leap. See if you can build a book of business that covers your business expenses before you make the jump and its a bit easier.

Dan

 

[FL P&C Broker]

For your agents are they doing mainly personal lines, and if so what is their split with you?

Mostly personal lines. I have one agent who is living off of his personal lines renewals and going after the larger commercial accounts. Agents come and go as they want. I really don't care as long as they write $40k to $60k a month.

 

[DEGRI]

Hi, Dan:

I am extremely motivated and am well-networked in my community. I will have no office expenses. Of course, gas, phone, etc. are a given.

I figure I need to write $10k of premium per week. This should net me about $40,000 in year 1, if my math is correct. If I had to, I could use a cushion I've saved (approx $10k, but I rather not tap it) to supplement whatever I earn. If I earned nothing, I could survive on this $10k for about 4 months...this means not earning one cent.

I am so fed up with being someone else's "*itch" for lack of a better word.

I have seen a couple companies that will start me off with base plus commission, with the base disappearing after the first few months. Although the training would be great, I'd be captive and captivity scares me. It's very competitive out there, and if I end up with a company that doesn't have competitive rates, I'd be sunk.

Thanks for your input. I am in the mental rumination conundrum right now. So many things to consider.

When I wrote insurance several years ago (primarily life and health), I did rather well. Of course, the life policies are what sustained me. The underwriting was a nightmare. Regardless, I did well enough to support myself.

I have no motivation... wish I was salaried some days
Look at the numbers, to clear 2500 a month, realize that you will have at least $1000 a month in expenses, so you need $3500 a month.

Initially, that means writing 35 policies, whether it is home or auto, just think in terms of 35 policies. At 3 policies per household (which is a bit high, but you can do it) means you find a new household 13 times a month, or 3 households a week.

After the first year, the renewals start coming in, so you can do about half of this in new business and use the renewals to stablize the income a bit.

Here's the problem. Writing 35 policies a month on your own is a challenge. Can be done, but it takes work, a lot of work. You have to market like mad, network with everyone, anytime you get a chance, and in general, be a phone-a-holic to get it done. You'll have 2-3 years non-stop to make it start to work.

Realistically, you need a way to support yourself for 6 months to make the leap. See if you can build a book of business that covers your business expenses before you make the jump and its a bit easier.

Dan

 

[Bertolinoins]

If you have no true obligations (kids, elderly parents, etc) and a 4 month cushion... go for it. Just do your homework and make sure your friend is offering a fair split and has access to all of the competitive markets available in your
area.

 

[Hefe]

$2500/mo probably won't happen right away but could be possible within the first year.

Part of the problem is that the first couple months will involve a lot of learning. If you can get in there part time to learn the carrier websites, underwriting guides, etc, you will have a headstart on the learning curve.

Another problem is that the commission takes longer to get to your pocket than it would for L&H. If you wrote a policy effective in July, the company might not pay the agency commission until August. Depending on the pay cycle, it could be the end of August or beginning of September before you see that commission. This is another reason for getting a headstart with part time work before you give up that salary.

You will almost certainly need to use several months of savings to supplement what you earn in commission but don't let that stop you from doing something that will make you happy.

My recommendation would be to go learn the quoting software and read the underwriting guides now. Start a couple marketing programs and spreading the word to networks. Write your own policies and very close friends (with your friend's help). Then quit your salaried job.

Good luck.