Inherited an insurance agency

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JBateman
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Inherited an insurance agency

Post by JBateman »

My father passed away unexpectedly in July, leaving behind about a 1.3 million dollar book of business. I was in law school prior to this; not involved in insurance in any capacity. I couldn't bring myself to sell it, so I took the plunge and got my license in September, and have tried to maintain it ever since. He had one employee in there - a CSR that he had on for a few years, and who had just recently became licensed and appointed under my father's contract - imaginably with the understanding that he would be there to supervise. Everything was going pretty well, all things considered, until the marketing reps from the various carriers started coming around. They were, understandably, none too thrilled to see a 23 year old who was licensed for just over a month taking the place of a man with 12 years of experience. Basically, all of the preferred companies are on the verge of pulling my CSR's appointment, which would set up about 55-60% of the book for nonrenewal. I am obviously entirely new to this, and I would appreciate any suggestions that any of you may have In terms of how I could maintain this book. I feel like I owe it to him to at least try. I have read much of this forum, and looked heavily into aggregators/clusters, trying to see if there are any avenues to pursue. What do you guys think; would anyone be willing to take me on? I am located in Colorado, by the way.
djergler
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Re: Inherited an insurance agency

Post by djergler »

Hi, I'm a reporter here at Insurance Journal and I'm interested in speaking you about what's going on. I'd just like know a bit more on background for right now.

My email is djergler@insurancejournal.com
My phone number is 619-584-1100, ext. 147
Smalltownagent
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Re: Inherited an insurance agency

Post by Smalltownagent »

First of all, my condolences for your loss. I was in your shoes a year and a half ago. Fortunately for me, I had already been in the business for 6 years before my father passed away. So I had already assumed his position before he passed, as he had a progressively worsening condition. Although I was still young, at 30 years old when he passed.

Kudos to you for getting in there and trying to salvage it and keep it going.

First of all, are you set up as a sole proprietorship? I would think that your appointment would be with the agency, and not individually to your CSR. Regardless, has your retention rate been going down? I wouldn't understand why the companies would pull your contract just because of your age and lack of experience, unless you started showing signs of slippage.

With your intellect (I assume by going to law school), it shouldn't take you very much time at all to get up to speed on insurance and getting some organic growth going.

Have you perhaps thought about hiring a more experienced producer? You may not have the funds for that right now, but just another thought.
tflood
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Re: Inherited an insurance agency

Post by tflood »

My dad passed away unexpectedly 14 years ago Nov. 1st, and I bought the agency out from the estate. However, I had been in the business working with him 10 years prior, so I was already into it and the carriers knew me. But is this always what I wanted to do, no.

Honestly, your headaches are just beginning. Don't do this because you think you have to, or this is what dad would have wanted, or any other reason unless the reason is this is what you can see yourself doing the rest of your life and are passionate about it and feel you are working within your unique ability.

Anything other than this and you are lying to yourself and not being true to yourself.

If you are passionate about law, and that was the way you were heading, sell the agency to a competitor and pursue your own dreams, go back to law school and finish.

Those that are most happy go to work saying "I can't believe I'm doing this for a living, and I'm actually getting paid to do it."

Live your own life, and fulfill your own dreams. Do what you are passionate about and you'll never work a day in your life.

Good luck,
johnhlas
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Re: Inherited an insurance agency

Post by johnhlas »

As others have mentioned, my condolences on your father's passing - very sorry. I also lost my father at a young age - 25. I'm 57 now, with 35 years in the insurance business. The advice tflood gave you is outstanding! Only take this on, if you share your father's dream, not because you think it is what he would want you to do.

However, if this is what you want to do, if you can find passion in this business, here are some tips from an old guy:
1) Join a local and state insurance association. I suggest the Independent Insurance Agents of America, including your state association (Colorado) and any local group of agents that may periodically meet. You might be surprised how many people will help you, even competitors. Agents of my tenure love helping younger people get started; it's a sense of perpetuation.
2) By following my advice in #1, find a mentor - someone you can call upon, can coach you, and sustain you through the tough times (you’ll have a few – we all do).
3) Attend as many insurance classes, seminars, etc. as you can. Education is key. Unlike law school, it's rather easy to become insurance licensed - that just makes you dangerous - you need to be a lifelong learner, which isn't bad advice in any endeavor. Personally, I recommend the (Certified Insurance Counselor) CIC program via the National Alliance for Insurance Education and Research, as a good place to start - there are many others.
4) Establish a business plan (strategy), marketing plan, and really think long and hard about your value proposition. Why should people want to become clients of your agency? Why will carriers want you to represent them? Why will people want to be employed at your agency? Personally, I have a written Value Proposition that I share. It reminds me of what I value and what value I can provide others.
5) Contact all your carriers and provide them with the plans, strategies, and proposition, I outline above. Let them know you've thought this through. Persuade them to give you a chance and prove your worth.
6) Make sure your Errors & Omissions coverage is in place and document all that you do.

I wish you well!

Take care.
-John
rcenters
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Re: Inherited an insurance agency

Post by rcenters »

As already mentioned, education is key. There are many concerns that insurance companies might have about your situation, but here are two big ones:

1. Will you be able to sell and retain the accounts you have? You might consider bringing in an experienced producer if necessary/possible.

2. Do you have procedures in place to get accurate information and documentation? Put another way - E&O prevention. If you don't have procedures in place now, get it done. This means you've thought about the varied and sundry ways things can go wrong, making conscious decisions on everything from making sure clients sign a completed (i.e., you asked them everything on it and didn't just make assumptions) application for every policy, to what you are going to do about calling to warn policyholders of non-payment cancellations. It's a huge undertaking, and a good agency procedure manual can easily be 50 pages with dozens and dozens of provisions, but it's important.
AgencyEquity
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Re: Inherited an insurance agency

Post by AgencyEquity »

JBateman: I will be happy to direct you in the right direction, please get in touch with me through my site below and I will advise you of your options. I am not here to sell you anything, I am just looking to help out pro-bono because of your unfortunate situation. I think your situation is very solvable, I don't think you will need to sell if you don't want to and I am happy to help.
http://www.agencyequity.com
The Premier Website for Insurance Agency Principals, Executives, and Producers with Executive-Level Business Needs
El Phil
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Re: Inherited an insurance agency

Post by El Phil »

JBateman, Just confirming that 'AgencyEquity' is an excellent source for possible solutions and options for you. Very helpful...
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