Help With A Huge Business Decision- Warning Long!

[andi9899]

I have been in the insurance industry for 15 years.  I was in agency for a long time and then decided to try the corporate side of things.  Well it didn't work out and I am wanting to get into agency.  The whole corporate thing is too political for me and I am not the most politically correct person in the world.  I have excelled in sales and think that is truly where I belong.  I did have an opportunity to be my own agent and it turned out that the contract was so restrictive that it wasn't the right fit for me. I now have two very nice opportunities to consider and am needing help making this decision. I am going to lay each out in the simplest terms without making anyone have too much industry knowledge.

Both companies offer a base salary. Company A is a commission draw. This means that if I make more than the base salary in commissions, I don't get both, only get the bigger of the two. Company B is a true base salary and I get both.

Company A will let me write the entire state of MO and 5 counties in KS. Company B will let me write both states in their entirety.

Company A will pay all of my expenses indefinitely. Company B will pay them for the first 2 years. After that, all expenses for rent, utilities, office supplies, etc are mine.

Company A is a W2'd employee position. Company B is a 1099 contractor position.

Company A will not allow me to write life insurance or contractor's policies. Company B allows for both. Not as big a deal as it sounds, but I would be closing referral doors since I have other agent friends who don't want to mess with those lines and would refer me all they got that walked in the door.

Company A requires a paid membership in order to carry their insurance. If someone does not pay the renewal membership fee annually, their policy cancels. This will have me chasing memberships throughout the year instead of focusing on sales. Company B does not require any membership.

Company A will require me to meet certain numbers for policies indefinitely. Company B only requires me to validate for the first 2 years.

Company A is a "scratch" agency, meaning I have to bring in all my own clients. Company B is giving me an agency that has already been in force for years as an agent is retiring.

Both companies offer health benefits. Company A offers them on a partial pay basis just like my corporate job did. Company B offers them that way for the first two years and then the benefits are at my own expense.

Both opportunities are fabulous for a new agent. Usually agents go in as "scratch" and work for years to get their book to where company B is offering to give it to me. And usually agents pay all their own expenses from day one and are 1009'd. And usually there are no health benefits offered. So each is a very sweet deal, just sweet in a different way.

Company B is offering me my freedom at a price.  I am used to working in the atmosphere of company B as I have always been an agent support staff.  I worked for years as an agent's top producer and figured why go back to that and make someone else money when I could be doing it for myself and keep it all. Company A is offering me absolutely no risk, but will not allow me to be as free and produce to my full potential.  Not to mention that the commissions on a life insurance policy is 4 times the commission on the other stuff.  It is also cutting into my earning potential in that way.  

Please let me know if you have any questions or thoughts.  I will try to get back soon to answer.  

[hoops902]

So security or earning potential.  It's a difficult question but not something people can really advise you on.  It depends on which you value more.

Part of my question would be what kind of insurance you're going to sell.  That would have a big impact on whether I valued the book of business from a retiring agent or not.  Also given that Company B seems very independent for their agents, how do you know the retiring agent hasn't told all of his clients already and they haven't already found new agents?  If you've been in insurance before, you understand that someone being handed a list of clients who are complete strangers to them isn't all that valuable (unless it's straight car/home insurance that renews on a regular basis and people are too lazy to change).  This list of people don't know you, they probably aren't going to buy life or fixed annuities from you just because you took over someone else's list.

[andi9899]

Aug 8, 2014 10:43:30 GMT -5 hoops902 said:

So security or earning potential.  It's a difficult question but not something people can really advise you on.  It depends on which you value more.

Part of my question would be what kind of insurance you're going to sell.  That would have a big impact on whether I valued the book of business from a retiring agent or not.  Also given that Company B seems very independent for their agents, how do you know the retiring agent hasn't told all of his clients already and they haven't already found new agents?  If you've been in insurance before, you understand that someone being handed a list of clients who are complete strangers to them isn't all that valuable (unless it's straight car/home insurance that renews on a regular basis and people are too lazy to change).  This list of people don't know you, they probably aren't going to buy life or fixed annuities from you just because you took over someone else's list.

Personal Lines, so Home, Auto, Life, Health, and Umbrella as well as Commercial Lines for contractors with Company A.  Company B would only allow me to sell Personal Lines which consists of (for them) Home, Auto, Health, & Umbrella.

I am assuming that there will be some people that are going to drop off since they don't know me.  But I should still have a decent amount of them stay.  The retiring agent is not allowed to tell the customers generally that they are leaving to prevent them from going elsewhere.  I am not foolish enough to believe that the retiring agent hasn't at the very least told her clients that she has a stronger relationship with.  


 

[andi9899]

Aug 8, 2014 10:44:38 GMT -5 @tbird said:

company B if you have a lot of confidence in yourself, company A if you are unsure

I have tons of confidence in myself.  This agent is an English speaking only agent.  So since speak Spanish as well, I have a larger opportunity for growth and at the same time, can continue to help her English speakers.  I also have brokerage abilities at both that will allow me to help those Hispanic customers that may not necessarily qualify for traditional products at both companies.  

[Iggy aka IG]

Fun!  Isn't it great to have options! 

I've had my own agency for 11 years.  I am fortunate to be both a direct writer and have a relationship with a large brokerage.

My vote is company b because:

~You will receive base+commission
~It is not a scratch agency (those are H.A.R.D. to start)
~You have a larger territory to sell in
~Writing life and contractors policies = larger commissions (generally) than home and auto.  My agency sells about 50% commercial, some life and health, and the rest personal lines.
~There are no membership implications (we have a membership available, but unlike a competing farm company, we don't require an insured to be one)
~You can write off the expenses (my company also paid them for 2 years, then I was on my own), including your own health insurance premium
~Being 1099 rocks! 

and finally, this:

"Company B is offering me my freedom at a price. I am used to working in the atmosphere of company B as I have always been an agent support staff. I worked for years as an agent's top producer and figured why go back to that and make someone else money when I could be doing it for myself and keep it all. Company A is offering me absolutely no risk, but will not allow me to be as free and produce to my full potential. Not to mention that the commissions on a life insurance policy is 4 times the commission on the other stuff. It is also cutting into my earning potential in that way."

Luck to you and keep us posted. 

[beergut]

 Company B

 Life insurance can be a lucrative area for you, and will allow you to grow your business more.

[busymom]

I vote B!

[andi9899]

I was leaning towards B also.  Because of the freedom.  But also because I can sell life and commercial.  If I can't, I am closing a lot of referral doors.  Lots of agencies don't want to deal with one or the other or both.  Plus, being able to write freely in both states allows me to get referrals that others can't write simply because of the state the risk is in.  I just can't see being dual licensed and not able to utilize that.

I'm out of here for now, but please keep the ideas/questions coming!

[raeoflyte]

I vote b.

Sent from my ADR6410LVW using proboards

[lexxy703]

Aug 8, 2014 11:35:30 GMT -5 andi9899 said:

Aug 8, 2014 10:43:30 GMT -5 hoops902 said:

So security or earning potential.  It's a difficult question but not something people can really advise you on.  It depends on which you value more.

Part of my question would be what kind of insurance you're going to sell.  That would have a big impact on whether I valued the book of business from a retiring agent or not.  Also given that Company B seems very independent for their agents, how do you know the retiring agent hasn't told all of his clients already and they haven't already found new agents?  If you've been in insurance before, you understand that someone being handed a list of clients who are complete strangers to them isn't all that valuable (unless it's straight car/home insurance that renews on a regular basis and people are too lazy to change).  This list of people don't know you, they probably aren't going to buy life or fixed annuities from you just because you took over someone else's list.

Personal Lines, so Home, Auto, Life, Health, and Umbrella as well as Commercial Lines for contractors with Company A.  Company B would only allow me to sell Personal Lines which consists of (for them) Home, Auto, Health, & Umbrella.

I am assuming that there will be some people that are going to drop off since they don't know me.  But I should still have a decent amount of them stay.  The retiring agent is not allowed to tell the customers generally that they are leaving to prevent them from going elsewhere.  I am not foolish enough to believe that the retiring agent hasn't at the very least told her clients that she has a stronger relationship with.  


 

Andi, How can company B allow you to write contractors if you can only write personal lines? When I initially told you I'd go with company B I assumed you could write commercial. Not being able to sell commercial lines makes me reevaluate my answer.

[TheHaitian]

B

[Iggy aka IG]

Aug 8, 2014 11:35:30 GMT -5 andi9899 said:

Aug 8, 2014 10:43:30 GMT -5 hoops902 said:

So security or earning potential.  It's a difficult question but not something people can really advise you on.  It depends on which you value more.

Part of my question would be what kind of insurance you're going to sell.  That would have a big impact on whether I valued the book of business from a retiring agent or not.  Also given that Company B seems very independent for their agents, how do you know the retiring agent hasn't told all of his clients already and they haven't already found new agents?  If you've been in insurance before, you understand that someone being handed a list of clients who are complete strangers to them isn't all that valuable (unless it's straight car/home insurance that renews on a regular basis and people are too lazy to change).  This list of people don't know you, they probably aren't going to buy life or fixed annuities from you just because you took over someone else's list.

Personal Lines, so Home, Auto, Life, Health, and Umbrella as well as Commercial Lines for contractors with Company A.  Company B would only allow me to sell Personal Lines which consists of (for them) Home, Auto, Health, & Umbrella.

I am assuming that there will be some people that are going to drop off since they don't know me.  But I should still have a decent amount of them stay.  The retiring agent is not allowed to tell the customers generally that they are leaving to prevent them from going elsewhere.  I am not foolish enough to believe that the retiring agent hasn't at the very least told her clients that she has a stronger relationship with.  


 

I'm confused.  In your OP you mention company A would not allow allow you to write contractors, and then the statement above indicates A would allow commercial.  And your OP indicates company B allows both life and contractors.  Do you consider contractors insurance to be commercial?

[lexxy703]

I had the same confusion Iggy.  I don't know about your agency but contractors are our bread & butter.  We would probably go under if we couldn't write contractors.  I'm talking artisan contractors, not GCs.

[Iggy aka IG]

Aug 8, 2014 14:27:47 GMT -5 lexxy703 said:

I had the same confusion Iggy.  I don't know about your agency but contractors are our bread & butter.  We would probably go under if we couldn't write contractors.  I'm talking artisan contractors, not GCs.

Same here.  I am able to write things my competitors cannot, including oil and gas exposures and other E & S risks. 

[lexxy703]

Aug 8, 2014 14:32:12 GMT -5 Iggy aka IG said:

Aug 8, 2014 14:27:47 GMT -5 lexxy703 said:

I had the same confusion Iggy.  I don't know about your agency but contractors are our bread & butter.  We would probably go under if we couldn't write contractors.  I'm talking artisan contractors, not GCs.

Same here.  I am able to write things my competitors cannot, including oil and gas exposures and other E & S risks. 

We have been doing a lot more E & S since the economy changed.  People are trying to fill niche markets & coming up with new business ideas.  I prefer the artisan contractors I can put on a BOP including their tools.  I have a company that will write them all day long at a very competetive price.

[andi9899]

Aug 8, 2014 13:28:14 GMT -5 lexxy703 said:

Aug 8, 2014 11:35:30 GMT -5 andi9899 said:

Personal Lines, so Home, Auto, Life, Health, and Umbrella as well as Commercial Lines for contractors with Company A.  Company B would only allow me to sell Personal Lines which consists of (for them) Home, Auto, Health, & Umbrella.

I am assuming that there will be some people that are going to drop off since they don't know me.  But I should still have a decent amount of them stay.  The retiring agent is not allowed to tell the customers generally that they are leaving to prevent them from going elsewhere.  I am not foolish enough to believe that the retiring agent hasn't at the very least told her clients that she has a stronger relationship with.  


 

Andi, How can company B allow you to write contractors if you can only write personal lines? When I initially told you I'd go with company B I assumed you could write commercial. Not being able to sell commercial lines makes me reevaluate my answer.

I got mixed uo with the A & B thing. Sorry. A lets me write life & contractors. B doesn't

[andi9899]

I just did it again! Sorry. Company A only lets me write personal lines excluding contractors and life. Company B lets me write contractors and life as well as personal lines. Sorry. Ihad it right in the OP. After that I lost it. I'm getting old.

[andi9899]

The more I think about it, the more I think Company B is the way to go. Really the lack of overhead is coming at the price of my freedom with A. I would still have expenses with B, but I would be able to write a lot more to make up for it.

Plus a scratch agency would be harder to to build with all the restrictions in place.

[lexxy703]

OK, then B still gets my vote.  I know you have a lot swishing around in your head.  But overall you have more earning potential with B & more avenues of business.  I think even though you will pick up your own expenses after two years with B, you are still better off having more lines to write.  Our agency has more commercial earnings than personal.  Maybe not more policies but more income because a commercial account can far exceed the premium of a personal account.

[andi9899]

Aug 9, 2014 17:19:01 GMT -5 lexxy703 said:

OK, then B still gets my vote.  I know you have a lot swishing around in your head.  But overall you have more earning potential with B & more avenues of business.  I think even though you will pick up your own expenses after two years with B, you are still better off having more lines to write.  Our agency has more commercial earnings than personal.  Maybe not more policies but more income because a commercial account can far exceed the premium of a personal account.

I do think that Company B will get my vote. I just see more opportunities there. Wish me luck! I'll keep everyone posted.

[bean29]

My husband's company pays 4x commission to new agents starting scratch agencies for 2-3 years.

I agree B sounds like a good deal but maybe you could get more out of A.