Now what?...

[Joatmon]

I'm a new P&C Agent in Texas, though not a young man. I have about a year in the industry starting with preparations for Hurricane Ike and ending with the carnage to our agency's client base after it's landfall and the curses of the economy.

I have actually had my license for only about nine months. Being hired as a 'man Friday' for an independent agency, I worked on their phone system, developed their website, configuring their workstations, their management software and their networks among other things. But the first six months of my tenure was mostly spent dealing with the carnage to the agency's client base.

Approximately 50% of the agency's book was vested in tier one and tier two (Texas coastal counties) personal auto, homeowner's, flood and windstorm coverages in the Houston-Galveston area. So a great many of our clients were wiped out with the hurricane. Some clients left the area. Many of the clients that remained were caught up in the typical, 'No that's wind damage - no that's flood damage, and we deny this claim' nonsense that follows major disasters. And there were also the clients that were bounced around when some carriers went under, pulled up stakes, sold their book in Texas or simply priced themselves out of the first and second tier counties with rate increases. I was tasked with mollifying devastated clients and mediating their denied or under-paid claims.

My initial sales training (except for licensing) was sparse to non-existent. This was not the agency's fault considering the circumstance. When I actually began writing business months after starting with the agency, it was personal lines and mainly auto. Our auto carriers were still pretty strong and jockeying for market share in a very disturbed local market. So we could cross-sell just about any time the phone rang. But we didn't have much left in admitted lines for homeowners and our clients were very resentful after their treatment at the hands of many insurance carriers and government agencies.

There is a back story that deserves mention. A previous agent left a legacy of poor paperwork and broken promises that, with Ike, led to both out-of-pocket expenses and E&O claims. The agency owner was bailing water and plugging holes as fast as he could. He moved me to the commercial side of the agency to help with the growing number of disaster contractors that needed coverages. I helped with some small and mid-sized commercial clients that needed changes in their coverages or policies. I also was required to help with locating errors in the previous agent's work. Most of this was very detailed and deadline-based work. Overall I received quite the education.

Long story short, (yeah, I know, too late...) the bottom fell out and here I am wondering what to do with my license. My previous employer is trying to help, but the market isn't there. I have a very good business plan for self-employment, but I can't even get E&O coverage without three years of experience. So as I said, what now? Any advice would be appreciated.

JOATMON

[Brenda H]

You might try Select Insurance Markets http://www.selectinsurancemarkets.com/. They partner with small agencies in getting companies that may not want to plant with a small agency etc. We started with them when our agency was just going independent from captive. Worked pretty well.

[Ray]

You may contact PIA of Texas @ 214-618-2365 for help securing E&O coverage.

[Joatmon]

Thanks for your replies. Unfortunately for me, I have few viable options. The last few months have not been kind to my personal economy. I haven't the resources to invest in opening a 'brick and mortar' agency. It doesn't seem many organizations are hiring first year agents either. At least not here. So I will have to be creative and think outside of conventional wisdom.

Perhaps my programming skills will come in handy. There are a couple of markets here that are under-served or deserve scrutiny for other reasons. I have been investigating a few very specialized markets where labor requirements can be minimized and that hold limited liability for the agent. Markets that are well suited to order automation. Ones that don't require a storefront; ones that just require an online presence fed by a network of personal and professional referrals. Strangely enough, marketing and advertising may be easier for this strategy than for a conventional agency.

Still, E&O is needed. PIA looks like they might be able to help, but I may have to take a partner with the requisite three years on their license to get coverage anyway. We'll see.

There are more than a few unemployed agents out there looking for anything. I just hate to do all the preparation, scut work and investment only to give away the farm. But if I just follow the crowd and keep looking for conventional employment opportunities, I may as well use my license for a bookmark.

Thanks again,
JOATMON

[tstjh]

Don't give up. You should also consider going to work for an insurance company as an underwriter. Depending on the company, you still would have marketing opportunities and a licensed underwriter gives credibility to the company.

[JasonBHBCo]

I do not know if this post is too late, but one big question comes to mind - what happened to the book of business that your previous employer had?
It sounds like you have had about 5 years worth of experience in your year of employment and have seen most sides of a P&C agency. Have you thought about opening your own agency (even one based out of your home office...)?

Regards,
Jason
Jason@bhbco.com

[Joatmon]

I do not know if this post is too late, but one big question comes to mind - what happened to the book of business that your previous employer had?
It sounds like you have had about 5 years worth of experience in your year of employment and have seen most sides of a P&C agency. Have you thought about opening your own agency (even one based out of your home office...)?

Regards,
Jason
Jason@bhbco.com

Hi Jason,

Thanks for your questions and comments. The previous book that my employer had, he still has, save what was lost due to disaster and attrition. I take nothing away from this relationship but experience and a few trinkets. There is no non-compete, or for that matter, even an employment contract in place. We were much too busy bailing water and plugging holes to engage in any meaningful formalities. Still, I could not in good conscience contact any of my former clients. It simply wouldn't be right.

Since my last post I have been working on an online agency that I would operate out of my home office. I have been working on a number of independent web sites that are clustered under a main umbrella. The focus has been very low liability markets (such as non-owner and certain bonds) that might make a one year agent opening a new agency a little more attractive to the E&O underwriter. But this is not going well.

In Texas, you need another carrier appointment to qualify for Flood, TAIPA or FAIR Plan appointments, which are the only markets I know that do not require E&O. You cannot get another carrier without E&O. And unless you have a perfect credit score, a substantial cash reserve and a fourteen part business plan listing all of your key personnel along with their respective resumes and/or bonafides, a one year agent is not going to get E&O at any price.

I have secured the domains and hosting services, flow charted each site, done most of the programming (some of which is revolutionary in terms of ease-of-use), and written the business plan. I have a number of professionals that will sign on without significant retainers (lawyer, CPA, etc.), some of which will refer all of their non-owner (SR-22) business. I have mapped out what I believe to be an effective marketing strategy. But all to no avail.

This week I will close my business accounts at the bank and mothball my fledgling company. No use throwing good money after bad. Not that I have any money to throw around. By the time we parted ways, I was bringing home less than $200 a week. Months later with no income to speak of and I am still left with the same question I asked at the beginning: "Now what?"

[ED3771316]

For E & O, try www.E&Oofamerica.com.

Not sure if they can help, but its worth a shot.

[Joatmon]

For E & O, try http://www.E&Oofamerica.com.

Not sure if they can help, but its worth a shot.

Thanks for the suggestion Ed, but it seems the website states that they are out of business.

[MLight]

Hi Joatmon,

Have you thought about hooking up with an independent agency that will allow you to own the book of business produced by you. It will be a lot easier to attract insurance companies when you have a book of business and you would not need an E&O insurance, they will provide it for you.

[ebrenneman]

joatman,
first ask yourself if this is what you really want to do. If the answer is yes then put your Business plan in motion. I write E&O insurance for brand new agencies less than a month old quite often look at around 2,000 a year through Lloyds. look for a good finance company to work out a reasonable finance agreement ( Standard Funding). there are companies out there that you can get appointed with, while you may not have major company names YOURS IS THE MOST IMPORTANT Then go back to the clients you worked with in the past and contact them. While you may have some ethical issues regarding Non-compete agreement ask yourself if your former employer would have ethically taken care of the clients and provided the correct products with oversight his business might have been better. Ethics lie in how we take care of and advise clients not how to bail out the boss and cover his but its in the licensing test. Not that I dont disagree with non competes but I dont think your former boss will be around much longer. Next learn the business for me knowledge and willingness to learn in employees goes way further than length of time in the business and a great agency owner will know that. Take care of your customers the right way and you will flourish dont and you will flounder- as you learned earlier through your past employer! Agencies look for good salesmen and hence good salesmen should look for good agencies dont be afraid to ask about the agency beliefs and how they operate, then ask them if they can recite the companies mission statement and see if it is in line with how they operate. then go to gitomer.com and sign up for weekly newszines they help keep you motivated and tuned. and most of all dont forget that this business is about perceverance, consistency and building relationships. Good luck.

[gaslamp]

Joatmon,

We have commercial producer positions available. Call me if you want to discuss.

Emilio Figueroa
(800) 920-4125 x. 205