New GA getting appointments

[paulbennings]

Hi all,

I am hoping to get your opinion on the difficulty in getting carriers to work with a new GA. Is it difficult to get appointments? More so than a retail agent would have? I currently work in retail and getting appointments has been relatively easy. I am also curious about capital requirements and anything else a carrier may be looking for. We have a pretty solid business plan in the works.

Thanks in advance.

PB

[mangroveman]

Hi all,

I am hoping to get your opinion on the difficulty in getting carriers to work with a new GA. Is it difficult to get appointments? More so than a retail agent would have? I currently work in retail and getting appointments has been relatively easy. I am also curious about capital requirements and anything else a carrier may be looking for. We have a pretty solid business plan in the works.

Thanks in advance.

PB

This is actually quite a difficult task, as GAs are a dime a dozen these days...so carriers are less apt to take new ones on.

Aside from the usual licensing and bonding, they are looking for a decent sized capital reserve (usually topping around 1MM). I had a premium finance company, which I feel was the only reason I got appointments.

What I would do if I was you, is spend some time researching in your area, find out what the need is, then go after that market. E.g. if there is crapp WC markets, go after that. This is easiest accomplished by just going out and interviewing agents.

That all being said, once you have an appointment or two under your belt, the rest come much easier. Also, do you have enough money to go to London for a few months? I might be able to dig up some contacts for you there. LMK.

Nick
941-408-5471

[paulbennings]

Thanks Nick. I appreciate the input.

I am surprised by the $1M capital requirement for a GA. So all these small mom & pop GA's have that much money sitting in the bank? Or am I missing your meaning? I would appreciate any clarification.

Thanks,

Paul

[LadyBroker]

As a wholesaler, what carriers look for in appointing a new Broker is -- can you give them business they are not getting now?
When you say GA, I don't know if you actually mean a Brokerage firm, or if you intend to ask for Binding authority. Binding authority is much harder to get, you have to have the staff, the knowledge and the technical capabilities to act as the carrier. Brokerage appointments are a little easier to get, but you have to be able to feed them business.

Where are you? If you're in Los Angeles, there are already 48 GA and MGA and Wholesalers on Figuerora Stree....but if you're somewhere with no competition, now that's different.

Do you trade with any wholesale brokers or MGA's now? Do you have a good feel for what they do, and how it's different from a retail shop?

We can always use good talent on our side of the world, so good luck and let us know how it goes.

[paulbennings]

Thanks LadyBroker.

I do currently work with many GA's. That is good advice and we will look into finding niches that may be currently underserved. We are located (or will be, hopefully) in Fremont, just North of San Jose, CA for those unfamiliar with the Bay Area. I know there is a dearth of GA's in the South Bay (with the big exception of Bliss and Glennon, which if memory serves, you are an employee of).

Our plan was to pursue binding authority but I too agree that we will need to establish ourselves before we are given such authority. My big concern are the barriers to entry, specifically, capital requirements. The first response here indicated that $1M at minimum was required; we have nothing near that. If that is the case and carriers will not appoint without having such reserves then maybe this is a pipe dream. Unfortunately, there is a void of info on the web about start-up requirements for wholesalers.

Thanks again.
- PB

[LadyBroker]

My suggeston would be decide what you want to write -- Earthquake, Contractors, Bars, whatever...find out 3 or 4 good carriers in that line, and talk to them about what you would have to do to be appointed. BUt I will tell you, they will ask for premium commitments, and typically a carrier would ask for minimum of $500,000 in a year for a new appointment. You'll need more than 1 carrier, so do you think you could potentially generate $2 million in premium volume in year one? That's the way I would think about it.

Plus -- as a retailer, what do you love? If you like to write contractors, do that...you would have the opportunity to build your own shop, in the way you want it. I think t hat would be really exciting.

Good luck!


PS - yes, my firm has an office in Morgan Hill, I hope you trade with them now.

[paulbennings]

Thanks so much for the info and advice... we do use Bliss quite a bit actually. Do you know about the capital requirements, if any? Are you aware of any such thing as the first person who replied stated? That $1M is required for a start-up wholesaler? Thanks again.

PB

[mangroveman]

Hey Paul,

That is the requirement where I live. What state are you in? I can find out for you what the requirements are as far as capital and bonding go.

[paulbennings]

Hi Nick,

We are in California. It would be a huge help if you had any further info about this venture, specifically the capital requirements.

Thanks!

Paul