Posted: Thu Sep 09, 2004 10:51 am
Ok after 18 years in this business I am tired of business as usual.
I am a one man shop, I tried having others produce but I didn't like it. I built a good group health and life book and I also have been a licensed P&C person (broker/agent licenses). I have...no let me change that, I used to be happy being an outside producer for existing P&C agencies. I would only produce for one agency and they received any / all of my P&C business.
The reasons were simple, they received 55 percent of the commission, gave me markets and they worried about the volume requirement for each different company. That worked fine until the mergers began. About 7 years ago the local big fish agency ate the agency I was producing for and informed me they don't use producers, everyone is salaried. I had two choices sell my book or they take it. Ok, nice that they gave me a choice and I sold.
So I went and found a large agency located in another city that told me they were committed to using producers and we can do some business together. Over the past seven years I have placed a lot of commercial accounts with them (small amount of personal) and things were going well. Today I received a letter telling me that as of November first 2004 they will no longer have any inside or outside commission producers. This time there isn't an offer to buy my book.....they are keeping it.
So I've been burned twice and won't go the agency route again. Now I must find markets and would love to find companies that are available for open broker business. I already found one for my speciality stuff. It is an insurance company that I already have business placed with the last agency, they accept BOR letters and no volume requirements. Over all these years I lost thousands and thousands in commission because I could have placed the business myself and would not have needed to split the commission. Plus once they told me what the commission rate was I realized that I wasn't getting the full split at the last agency.
I am getting tired of searching for broker friendly markets. Does anyone know of a source for a list of insurance companies that have open broker arrangements?
Over all these years I've heard the insurance company line of why they need volume requirements, appointments and such but it is just that, a line. Insurance companies have a social compact and because of that they enjoy freedoms from rules that other companies must abide by. Therefore it should also be a compact that all States, Cities and Counties have access to the markets, different companies, best rates, service, etc. I feel the insurance companies are failing to achieve such a goal. A small town in the middle of Montana will not have the same markets available to their citizens as will a larger city. The reason is the insurance company volume requirements. How can a small town agency/broker fulfill the volume requirements that insurance companies require for an appointment. That small agency/broker would probably be lucky to keep one company satisfied.
Two doors down from where I live is a Fed Congressman (was a State guy) and he and I have talked about this problem. The Fed's and the State's are aware of the problem with markets. He has said the problem has reached some discussion groups. The insurance companies will either open up on their own or they may see legislation. I'll probably be old and grey before I see it.
I don't even want to get into the hard market soft market stuff. What crazy knee jerk methodology using stock market returns to peg a price of their item. Stock market is roaring and hey, voila...soft market. Why in the world haven't they figured out how to trend their business using a different method so that we don't go through the hard market soft market cycle?
Sorry for the length but I had to get some things off my chest.
I am a one man shop, I tried having others produce but I didn't like it. I built a good group health and life book and I also have been a licensed P&C person (broker/agent licenses). I have...no let me change that, I used to be happy being an outside producer for existing P&C agencies. I would only produce for one agency and they received any / all of my P&C business.
The reasons were simple, they received 55 percent of the commission, gave me markets and they worried about the volume requirement for each different company. That worked fine until the mergers began. About 7 years ago the local big fish agency ate the agency I was producing for and informed me they don't use producers, everyone is salaried. I had two choices sell my book or they take it. Ok, nice that they gave me a choice and I sold.
So I went and found a large agency located in another city that told me they were committed to using producers and we can do some business together. Over the past seven years I have placed a lot of commercial accounts with them (small amount of personal) and things were going well. Today I received a letter telling me that as of November first 2004 they will no longer have any inside or outside commission producers. This time there isn't an offer to buy my book.....they are keeping it.
So I've been burned twice and won't go the agency route again. Now I must find markets and would love to find companies that are available for open broker business. I already found one for my speciality stuff. It is an insurance company that I already have business placed with the last agency, they accept BOR letters and no volume requirements. Over all these years I lost thousands and thousands in commission because I could have placed the business myself and would not have needed to split the commission. Plus once they told me what the commission rate was I realized that I wasn't getting the full split at the last agency.
I am getting tired of searching for broker friendly markets. Does anyone know of a source for a list of insurance companies that have open broker arrangements?
Over all these years I've heard the insurance company line of why they need volume requirements, appointments and such but it is just that, a line. Insurance companies have a social compact and because of that they enjoy freedoms from rules that other companies must abide by. Therefore it should also be a compact that all States, Cities and Counties have access to the markets, different companies, best rates, service, etc. I feel the insurance companies are failing to achieve such a goal. A small town in the middle of Montana will not have the same markets available to their citizens as will a larger city. The reason is the insurance company volume requirements. How can a small town agency/broker fulfill the volume requirements that insurance companies require for an appointment. That small agency/broker would probably be lucky to keep one company satisfied.
Two doors down from where I live is a Fed Congressman (was a State guy) and he and I have talked about this problem. The Fed's and the State's are aware of the problem with markets. He has said the problem has reached some discussion groups. The insurance companies will either open up on their own or they may see legislation. I'll probably be old and grey before I see it.
I don't even want to get into the hard market soft market stuff. What crazy knee jerk methodology using stock market returns to peg a price of their item. Stock market is roaring and hey, voila...soft market. Why in the world haven't they figured out how to trend their business using a different method so that we don't go through the hard market soft market cycle?
Sorry for the length but I had to get some things off my chest.