looking for some guidance on startup agency

[qz4k5y]

Starting my own independent agency in Ohio with minimal insurance experience after loosing my job due to downsizing.
I got licensed on my own, was appointed with Farmers for a couple months then saw that if i wanted to be in this business the way to go is independent. I have since, luckily, been appointed with a very good company as an independent. Been with them for a whole 4 months now. Phone is not ringing off hook. I am looking to target small commercial accounts and off those get the personal lines. Have a bunch of x-dates coming up in the new year that if i do get some will help me tremendously.

Question: What is the best thing for me to do right now? I know this market is hard and this business is not easy, but if i can make it this is what i really want to do. I am all about the freedom it brings, but if i can't pay the bills - no good. I contacted another independent agency who has alot of years experience to see if we could work something together. I think i need a Mentor to help guide me through this startup. Someone to review policies with, help me to do the quotes, and present to the customer during close. My DSM is not exactly the most knowledgable when it come to commercial lines. They said they will contact me in the new year and they are interested in speaking. I am also appointed with Appalaction Underwriters to fill markets i can't with my main line.

Any input would be greatly appreciated. Thanks.

[Big Dog]

Most here (including me) will recommend that you align with an independent agency versus trying to go on your own. Given the fact you have minimal experience, and what experience you do have is with Farmers, joining a mid-sized regional firm is going to be the best recommendation.

[qz4k5y]

Big dog,
Thanks for the reply. That is what i thought. I am really hoping that something works out with the independent i am talking with. I need mentorship. They did express interest in working with me because they would like to have access to the carrier i am appointed with (they can't get appointed with this particular carrier because their location is too close to another agency that is big with this carrier). Any advice on how to approach other agencies to see if they would be interested in working something out? I guess i will have to give up ownership of anything that i write until i can stand on my own right? Beggers can't be choosers you know.

[scott]

A good mentor supplements the skills you have with guidance, experience, and knowledge you don't have.

The mentor should be available to you easily and quickly - providing "cut-to-the-quick" feedback and advice that zooms you forward to your objectives.

--Strategic help with your business
--Tactical help with your clients, employees, and prospects
--Coverage and risk mitigation advice that makes you a hero

[gregcw]

qz4k5y I think that if you will read a lot of these posts you will find that there are many ex-FIG agents on the IA side right now. I started out with FIG in a hard market and feel that for start up agency that's not a bad deal because a lot of insured's are shopping and your not burdened with a lot of customers requiring service. I worked with FIG for between four and five years before the honeymoon was over and two more for a total of seven years before the divorce, which was about 21 years ago.

The plus side, for you, is that FIG hasn't contaminated you with their insurance mis-information yet. The down side is that you haven't gotten the training that they do best "SALES".

Big Dog had a good suggestion but since it is a different time and also a different market than I had when I left Farmers, I don't know how workable either his suggestion or mine are today. I had a small book of business, about $75,000, outside of Farmers to build on, and about $700,000 that I couldn't compete for (my FIG book). The direction that you are considering in your response to Big Dog is callled clustering and is not a bad Idea. It gives you access to their markets as well as them to yours. It is one that I would suggest getting a good and clear contract withe the other regarding their responsiblities and yours. This would include things like business ownership and commission splits. Your state IIAB or PIA should be able to give you some direction on that.

scott's comment would blend well with mine and qz4k5y's and appear to assume that the agency you are considering clustering with would be able to also mentor you.

Either way it is critical that you get educated. When I left Farmers the first thing I did was enroll in a CIC (Certified Insurance Counselors) Agency Management Institute with the National Alliance for Insurance Education. I figured that if I was going to be independent I should learn how they did things. With just a few months in the industry this might be too big of a bite to take initially. I would suggest the CISR course which is more elementary and then pursue the CIC designation. Both will give you a good grounding in Insurance products and coverages. Their URL is http://www.scic.com/.

While I was still an FIG agent, in my early years, I used my Veterans Benefits and got training in Business Management, Marketing, Salesmanship, Accounting, Personnel and many other business related courses. Since I'm sure that you know your strengths better than I do, the two that I would strongly recommend are Salesmanship and Marketing.

[qz4k5y]

Thanks everyone for the input, any suggestions/comments really mean/help alot right now.
The agency that i am talking with did mention something about me being a sub-agent with them but i am not sure i want to do that and give them ownership over any business i bring in. The funny thing right now is ( and i use the word funny when it is not really funny to me at all) is that i am amazed at how little knowledge/support i am getting from my carrier. My DSM knows nothing about commercial and when i call my underwriter it is like i am bothering him and he is too busy to really take time and give me a good answer to my question. Maybe i am expecting too much and that is par for the course. I don't understand how they can put a "newbee" into the field and not expect to give him some serious mentorship for at least a couple years. The company i am with is an excellent company, and others have been where i am and are now making excellent livings so i know it can be done. I have tried to talk to a couple successful agents for the company in my area and they are not very helpful. I really believe they don't want any new competition and hope i fail. Oh well, i am just going to keep moving forward and hope something breaks. The first six months of the new year will be very telling. Thanks to all for comments!

[gregcw]

Thanks everyone.....
The agency that i am talking with did mention something about me being a sub-agent with them but i am not sure i want to do that and give them ownership over any business i bring in............
The funny thing right now is ( and i use the word funny when it is not really funny to me at all) is that i am amazed at how little knowledge/support i am getting from my carrier. My DSM knows nothing about commercial and when i call my underwriter it is like i am bothering him and he is too busy to really take time and give me a good answer to my question. ........ I don't understand how they can put a "newbee" into the field and not expect to give him some serious mentorship for at least a couple years. The company i am with is an excellent company, and others have been where i am and are now making excellent livings so i know it can be done.

The Blue highlight is what I talked about in my first response where I said that you want a good and clear contract. Remember, you are negotiating and in a position of strength since you are bringing them something they want and are unable to get without you. You will want to negotiate the ownership of business and percentage splits on commissions as well as what they do for their share and you do for yours, as well as a clear understanding of what happens if and when you split the sheets.

The Red highlight was not mentioned in my first response. One of the things in being Independant is that the responsibility for training and education is yours and not the companies. One of the keys to discussing a risk with the underwriter is to describe the risk to him/her and ask specific questions regarding eligibility and learning what they are looking for. Remember that it is not their job to train you but it is their job to tell you what parameters that they are looking for in a risk. After all they didn't put you in the field YOU did.

The Blue highlight is that with Farmers they did put you in the field and thus did have some responsibility to train you. Even there that didn't mean that they would or in some cases even could. Many of their District Managers could better be described as District Manglers. As an Independent Agent the burden is entilrely on you to do these things. The agency that you are clustering with is where you need to negotiate some mentoring from. A suggestion is on your % of new and renewal commissions levels i.e being prepared to give up some commission, either new or renewal, in exchange for some training.

[Shagster12]

qz4k5y,
Here are some more thoughts.
Someone once told me when I endeavored to do something on my own that an attorney usually does, "You're in danger because you don't even know what you don't know".. I think this strongly applies here.
Because of your lack of experience in the field and your not knowing just how much you don't know, and with the lack of support you're seeing right now, here's what I would recommend.

As previously stated the carrier is not responsible for training you and in fact if you begin to require too much training and support it's likely they'll begin to second guess your appointment! There is however a great way to get the support you need from an existing resource that will gladly help you.
Here's what I did when starting out in this business in a marketing position where I was responsible to market business for a staff of producers who didn't know the coverages or classes they were trying to cover, and where I was brand new in the business. Just two words can be your solution, surplus lines! Here is a built in system for mentoring you can access immediately!
Understand that this business revolves around relationships in every facet. Sales, marketing, underwriting, servicing, claims... everything about this business works better when you build relationships. That said I recommend you start calling around to some of your local surplus lines brokers and begin to look for two or three local wholesalers who are willing to help and guide you. They are already knowledgeable about the markets and they WILL help you gain understanding of what you need to do to get accounts underwritten. That is what they do, they NEED to write business and if they can help you write business then you both win. I built relationships in the surplus lines markets with people who have helped me learn and grow and become a successful producer. Those relationships are as strong today as ever even after changing agencies 3-4 times over the past 14 years. So call a few and get someone on the phone that underwrites surplus lines and tell them your situation, then just ask if they'd be willing to help you when you have submissions that don't fit with your appointment. Eventually I believe you will find you are learning things that will even apply to help you be more successful with your appointed market as well.
Good Luck!
Shagster

[qz4k5y]

Hey Shagster,
Thanks for the comments. You guys who have posted replies have really been great and i appreciate it.

Surplus line? What exactly are you refering to? Do you mean the risks that my mainline won't touch?
I did get appointed with a wholesaler who i believe does handle all these types of markets.
So should i get the names and numbers of a couple underwriters and ask them to help me out? Right now i pretty much have just been discussing with the marketing guy who brought me on when i get risks for them to look at.

Example: 4 sports bars coming up for quote. My mainline won't touch it because of the liquor liability. My plan was to sub out the liquor to a market with the wholesaler and do the BOP with my mainline who is competitive. Do you think this is the way to handle this or should i just quote the whole thing through the wholesaler since my mainline won't do the liquor part?

I agree 100% with your comment about the lawyer, that is me to a tee right now.

Thanks everyone for your guidance.

[lindam]

I would recommend going to http://www.score.org website and signing up for a mentor with insurance background. I have found some highly qualified retired executives that gave stellar advice and at no charge. You can sign up for several mentors or stick with one. You may have a local office with someone that has decades of successful background doing exactly what you want to do. Let me know if it works as well for you as it has for me.

[volstrike3]

I don't normally recommend aggregators like Networked or Agent Secure for experienced and established independent agents... but for someone like yourself they may be a good option. They will give you access to markets and protect you from yourself to a certain extent. Their service reps are used to hand holding and since they are splitting commission... they will be more helpful than a company underwriter who views your calls and questions are more "work" instead of a sales opportunity.

[maryh]

If possible contact Rough Notes Company at www.insurancemarketplace.com and get a copy of the The Insurance Marketplace which is a National Directory of Excess, Surplus and Specialty Lines companies. They list markets by class of business. Another source would be My New Markets at www.mynewmarkets.com where you can also search by class of business.

Finding people like those assisting and answering you now are a great way to help you in your success as an independent agent.

I have been a licensed Insurance agent in Texas since 1981. I have worked personal, commercial and was a Senior Underwriter Assistant with a major MGA for 5 years. I now work with a premium finance company that finances the commercial insurance policies in the US. Please feel free to email me when needing a market and I will be glad to assist.
I am out talking with agencies and marketing reps (companies and MGA's) every day and would be more than willing to ask if they know of good market.

Good luck in your venture.

Mary Coovert Holeman
Senior Regional Vice President
Express Premium Finance
mary@expresspremium.com
832-766-7977

[qz4k5y]

thanks all for your great idea's. Everyone of them i will use to some extent. I really appreciate your helpfulness.

[LadyBroker]

Something that I would also suggest is that you print off hard copies of EVERY form your carrier provides, and read them. That is how you learn about coverages, not from your DM or mentor, because really, are you sure THEY have read the forms? 99% of the retailers with which I work do not even know what is covered on a standard Property form, they just assume Everything is covered...until there's a loss, and then the adjustor has to deliver bad news to the insured.

Find an iSO copy of the CP0010 and the CG0001 form, both Commercial forms, and start from there. Take some CPCU classes. Take some Insurance classes in general.

As far as your FIG underwriter, here's the thing to do there -- don't call them on the phone. Make an appointment with one of them next week, and take them to lunch. Be a face they recognize, and trust me, they will help you. Keep in mind they have 100 agents just like you, with very little training, and if you want them to help you, become someone they want to help.

Good luck.

[marydavis]

Just a small suggestion, may or may not help, but hire a seasoned CSR, preferrably with a CISR Designation, who knows all the ins and outs of company guidelines, binding authorities, eligibilty, etc. for commercial and personal lines. She should be familiar with alot of different companies and their underwriting guidelines. She may be an asset to you...