Any tips for starting my own independent insurance agency?

[Johnny949]

Hello, I live in California and I am new to this forum. I have been in the insurance industry for about 10 years. I worked as a sales agent for an independent broker for 4 years selling primarily personal lines and a little bit of commercial lines insurance. My current employer is a well-known insurance company but they decided to relocate to another state by the end of this year. I have been with my employer for over 5 years. I started as a CSR, became an Underwriter, then a Coverage Specialist, and currently a Claims Examiner for personal lines insurance. I have been seriously thinking of starting my own independent insurance agency within the next 12-18 months. I know getting appointments will be hard, so I am thinking of using an MGA at first. I know I will need a bond, E&O, and eventually an Agency Management system. I plan to open my agency in Southern California. To all the veterans out there, please provide your input so that I can avoid costly mistakes.

Thank you so much in advance,

Johnny

[Big Dog]

Have you considered aligning with a mid-sized regional brokerage? Given the current economy, and the over-abundance of insurance agencies in SoCal, it might be a wiser choice to look at either a mid-sized regional, or one of the smaller national brokerages. Personally, I'd recommend avoiding the Marsh's, Aon's, Willis's, etc. if at all possible.

[pita3333]

Johnny: Search the topics...LOTS of discussion on this subject the last 2 or 3 years.

tho..in back of my head I am saying..."not everyone can work for them selves without having learned the business from all sides". There is a diff between retail sales and claims/underwriting. "Coverage Specialist" sounds nice...but there are lots of corporate titles that convey the impression of expertise but really are there to just give an impression.

Ya...okay...perhaps a bit jaded...but really do know that there are lots in our industry who need to learn more before presenting themselves as our face.

[JasonBHBCo]

Johnny,

I am new to this forum, but I have worked with (a couple start up) agencies on this topic. There are numerous areas that you need to plan out, and much detail in each of these areas that should be well thought out prior to a venture like this.

In no particular order, some of the areas to fully think about before moving forward (not all inclusive, but a start):
- Company appointments (or alignment with a regional brokerage / MGA as was mentioned)
- Products you will offer
- Client demographic (define the insurance needs in the geographic area you will be operating)
- Existing contacts and how you can continue to provide them service (is there a non-compete anywhere on the table?)
- Additional employees (think about the skill sets needed to do the different types of jobs that a successful agency will need to perform)
- Licensing
- Office space (or a home office) and setup
- Technology / Management System
- Workflows and procedures
- Advertising and the use of social media to get the word out
- A good business plan that addresses each of these, especially if you are going to be looking for a business loan
- The ability (and willingness) to struggle along, find your niche, and above all, provide a differentiator to your clients

Jason

[Bob Lake]

There is only one way that makes any sense. Hook your wagon to 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 ready to "roll over". This method will also allow you to avoid all of the expenses that will eat you alive if you attempt to go it alone. Why do it the hard way when you can do it the easy way?

[FLagent]

I just recently started my own agency in S. FL and it was much harder than what I expected. I have owned a business before and managed an agency and thought I was prepared for all. It takes a few months to get through the administrative set-up (licensing, office lease, agency management, and co contracts) I suggest you find the best office location you can fit into your budget. Location is everything with the way the internet has tapped into our industry. I am on my 3rd month and I now just started quoting. My advice: Network a lot and do your homework BEFORE opening. By networking you can get a feel for the industry and where you will need to shine.

Good luck!

[wlunday]

Johnny, my two cents is for you to find a local independent agency that you look up to, and that will allow you to build your practice there. Many agencies are looking for the right talent, as well as someone with aspirations of ownership in the future. Perpetuation of an agency is often more difficult than you'd think, as many of us small indies promise a level of personal service that is not delivered by the bigger regionals, so we don't want to sell out to them when we retire.

A young to middle-aged, skilled, knowledgable, personable, (and above all honest and ethical) person is a positive addition to any agency, and often hard to find. If this describes you... don't sell yourself short. If you take this route the agency you work for (and later own?) will already be marketing, will already have a client data base in place, will already have carriers in place for you. Best wishes!

Wayne Lunday, LUTCF, CLU, ChFC
High Cascades Agency
Castle Rock, WA

[Johnny949]

Wow..thank you everyone for your honest feedback. This forum is amazing because of the people like you. I have a couple agencies that I am interested in and will be talking to them over the next couple weeks. With the current condition of our economy, I think connecting with an agency that fit my vision and values would be the better route. I can learn and build my business at the same time.

Thank you so much!

Johnny

[andybkohler]

If you decided to open your agency, first size up the competition. Its important to know their strengths, weakness and opportunities. Both diversity and focus are important in growing your business. Because the industry is constantly changing, I believe that a large number of small to medium size clients provides more stability than smaller number of clients. I would develop a niche marketing program that focuses on an under served market. Inject your personality into your marketing program. Clients like to work with personable, relatable agents. Be yourself! Don't sell on price, sell the value of your service, which includes your recommendation. Find products and/or services that make a difference to your clients. We are a MGA the works with many upstart agencies. We have a unique UPAY-As you-Go program. With UPAY-As-Go, premium is based on actual payroll, not estimates, eliminating annual premium down payments. This will make a different when cash flow is a issue for clients. Find different programs like this that truly helps the clients. Thus, adding value to you and your agency. Also, get a mentor. Find someone your can lean on, and who motivates you. Having an experienced professional available for questions, that you can call regularly and will help you take your business to the next level. Measure your new business production-such as where you new business sources come from, what you're spending on leads, and your output. Lastly, you must really want the challenge. Competition is stiff and you must love your work to get ahead. Don't set the standards, exceed expectations. If you have any questions feel free to contact me at Andy.Kohler@UnisourcePA.com.

[Bob Lake]

Johnny 949...

Give me a call.

Bob Lake 714.544.5003 Ext 202

[carlos gil]

Johnny,

We can have you running in less than a month with all the carriers, E&O ($199 per Year), Rater, and an Agency Management System.

Plus the ability to do taxes.

Please visit http://www.FiestaFranchise.com for additional information.

Should you have any questions please contact us.

Carlos Gil
Sales & Marketing Manager
16162 Beach Blvd Suite 100
Huntington Beach, Ca 92647
(714) 842-5420 Ext 237
(714) 842-5401 Fax
(714) 916-1758 Cell
E-mail: E-mail: CGil@FiestaInsurance.com