by Guest » Wed Jun 18, 2008 06:17 pm
I noticed on other posts here that many of you folks are very generous with advice, even to newcomers, so I wanted to ask for opinions. I'm 42 and semi-retired from my job as a consultant, and am considering becoming an insurance agent in a coastal Florida town, where I live. One of the biggest motivators I have is that I and all of my business contacts here feel very poorly served by our current group of agents. The usual larger firms are here, and 4-5 independent agencies, but you'd be hard-pressed to find anyone who was truly satisfied with their agent(s). I own a number of residential and commercial properties, and the list of troubles I've had with the agents and their employees is too long to type.
So seeing a need, I'm looking into filling it. The focus in this area would be more on property and liability, and less on life and health, as there are loads of rental units here, and many people live elsewhere primarily.
I'm not looking to make tons of money, just provide a great service at reasonable profitability. And perhaps to reinvent myself a bit with a whole new career.
Here are my questions:
1. Am I crazy to think I can do all the bookwork/licensure and then start my own agency?
2. Is it wrong to expect a reasonable profit if the majority of the policies are property and liability?
I'd appreciate any comments or opinions. Thanks.
So seeing a need, I'm looking into filling it. The focus in this area would be more on property and liability, and less on life and health, as there are loads of rental units here, and many people live elsewhere primarily.
I'm not looking to make tons of money, just provide a great service at reasonable profitability. And perhaps to reinvent myself a bit with a whole new career.
Here are my questions:
1. Am I crazy to think I can do all the bookwork/licensure and then start my own agency?
2. Is it wrong to expect a reasonable profit if the majority of the policies are property and liability?
I'd appreciate any comments or opinions. Thanks.
Posted: Sat Jun 21, 2008 11:28 am Post Subject:
Welcome to the community, Dan :D and thanks for the good-words.
lemme assure you that all the agents are in this business to make money, its their profession and they earn their breads by selling policies. Hence, its not at all wrong to think about making money. I think you stand a very good chance to become a successful agent if your area lacks one.
the primary quality that's an agent needs is the quality to remain sensible towards the needs of his/her clients. You need to have a clear mind to ascertain the priorities of your client and suggest a plan accordingly. If you can successfully manage to do so, you wouldn't have to worry about getting business.
However, to start as an agent you're required to obtain a license from the insurance regulatory board. And for that you have to appear for the licensing exam. Hence, get yourself enlisted first for the license. Wishing you all the luck!!
Posted: Sat Jun 21, 2008 11:38 am Post Subject:
Property and liability is one of the major form of insurance, and there is no doubt a big market is available for it. IMO you shouldn't have any difficulty in finding business. However, the success of an agent largely depends upon the ability of the agent himself. You may come across both immensely successful and not so successful agents at the same time. But don't let the worry of failure prevent you from giving a start.
Posted: Sat Jun 21, 2008 11:47 am Post Subject:
Am I crazy to think I can do all the bookwork/licensure and then start my own agency?
I guess not. However, it may consume a great deal of your time. Some insurer offer on-job training to their agents, you check out this option in your locality. Also, interacting with the other agents of your locality may help you to gain a fair idea about the market. They may also help you through the process of obtaining the license.
The course materials are available online. try searching them on net. and yeah, best of luck with you new career venture. Adieu
Posted: Sun Jun 22, 2008 01:28 pm Post Subject:
Dan123 to give a little perspective I'm Life, Health and Annuity licensed in Florida and can't even spell P & C....that being said....
Dan123 asked:
1. Am I crazy to think I can do all the bookwork/licensure and then start my own agency?
Yes.
If you mean you are going to get your license, open an office, pay rent, phones and all other expenses without the first little bit of training from anyone whose been in the business before you.
In addition, P & C... is NOT Life, Health and Annuity sales, they are as different as night and day. I could be wrong but I don't think you can even get contracted and appointed directly with ANY P & C companies as a brand new licensed agent. That means you'll have to work for some agency somewhere which means you'll be splitting commission and probably won't own your block of business.
2. Is it wrong to expect a reasonable profit if the majority of the policies are property and liability?
Yes.
Commission on P & C is generally about 10% of premium. A $2,000 premium on a homeowner's policy would put $200 bucks in your pocket, IF, they paid the whole $2,000 annually.
How many of those do you have to sell to make $50,000?....ONLY 250.
A $100 per month auto policy would put $10 per month in your pocket, $120 bucks PER YEAR.
How many of those do you have to sell to make $50,000?....ONLY 417.
Also, P & C is heavy...VERY heavy service intensive. If you are doing all your service work you won't have anytime to develop new clients.
Are you also going to hire a customer service representative and pay her $25,000 per year BEFORE you even write your first case? Okay, that's ONLY 63 homeowners policies and 105 auto policies you need to write JUST TO PAY her salary.
Now does that seem reasonable for a brand new agent with ZERO experience?
Lastly, and not to discourage but to put things in perspective, the failure rate for insurance agents is staggering.
If I hired 100 brand new agents on Jan 1st by Dec 31st of that same year only 10 agents would be left, by Dec 31st of the 2nd year only two (2) agents would still be in the business.
All that being said, (and P & C agents please jump in and correct any of my words if I have misspoke about your side of the business), you write your own paycheck in this business.
Somebody wrote on one of these threads that selling insurance is the hardest $35,000 you'll ever make in your life or the easiest $100,000 you've ever earned.
The reason for the dichotomy in earnings is the agent.
Posted: Sun Jul 20, 2008 07:45 am Post Subject:
I am sorry if I am rude but if you think you can handle all th database and paperwork all on your own.
Once you become an insurance agent,handilng paperwork is not an easy job.You have to maintain all tha data and records of your customers and potential prospects..
I will advice you to keep a seperate employee who can handle all this and you can just concentrate on what you can do the best.
And why are you being so skeptical with policies related to property?
They can bring you huge profits.
Posted: Sun Jul 20, 2008 02:06 pm Post Subject:
Hello, I am a P&C (new) agent. I hope I can shed some insight on this. First of all it is almost impossible to start out brand new and get contracted to sell P&C. Life and Health you can right out of the gate. I am also licensed in Life and Health.
The commission stated with the previous posters being about 10% is about right for a average. I have however negotiated my contract to receive higher. I also have my own book of business but I am under a general agent. They do get a cut of my commissions but it is well worth it. You can use their office, you do not need to worry about the customer service because they already have employees that handle that.
Look at some major companies like Nationwide, State Farm and Allstate.
Posted: Sun Jul 20, 2008 09:16 pm Post Subject:
Hi Dan
Please do not take offense .... I do not think it is a good idea at all! Gary gave you great info already but I'll give you my two cents.
I recall when I started in insurance thinking similar thoughts to yours. I thought my service would be so much better than the industry's and I would rake in the cash. My service is fantastic but it is so hard to provide top level service and make enough sales to earn a good income. Most agents then give adequate service to keep 80-90% of their clients and earn a reasonable income.
I have seen so many people fail in insurance. I should say I have seen so many capable, motivated and intelligent people fail in insurance. The learning curve is huge and the sales skills required are also big.
All that said, this is a great industry if you succeed. If you sincerely want to get into it take a position as an employee to learn. OR go to work as a captive agent and learn all you can. That's what I did and I recently became independent because that was my goal.
So I am almost starting all over again these past couple of years. I am surviving due to many years of training and sharpening my skills. Notice I said surviving - starting a business is hard and profitability does not happen over night.
FYI before I came into insurance I had run a very successful business and I had worked as a business consultant.
Good luck
Posted: Sat Mar 21, 2009 01:41 pm Post Subject:
well said Mr. Ontario Broker..i wanted to ask something but as you are from Canada, wonder you can help me here in India..
Posted: Tue Mar 24, 2009 03:04 am Post Subject:
One of the important things to ask yourself is how much capital you are willing to invest. Depending on your financial situation, you could sink a lot of money into the business right out of the gate. Hire a customer service person / receptionist; Hire a few agents (maybe some with a little bit of experience)...and start out very deep in debt.
In the world of business, as you know, you can fill a niche and profit handsomely. However, it seldom happens overnight...and insurance is not as easy as many think. Like any business, an infusion of capital can either slingshot the business to profits...or make the owner (s) very unhappy and broke.
As many have suggested, you could either look at working under an existing general agent...or even work for awhile as a captive agent. OR you could start with life insurance, annuities, and health insurance...and go from there.
The great thing about owning an insurance agency is that you have so many different options that you can offer a client. If they don't need life, there's long term care...or health...or annuities....and other products! Good luck with your venture, and we'll be as much help as possible!
Posted: Tue Mar 24, 2009 08:41 am Post Subject:
Well, I think it’s the charm of being your own boss that lures the young agents towards becoming independent. Often they ignore the costs and experiences associated with it.
Chris you have offered great advices to the OP. Hope he would benefit from those.
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