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Brainsmile Brainsmile is offline
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OT: My brother is considering being an insurance agent... - 03-30-2012, 10:09 PM

Good career? I have no insight to offer him.
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CalBear68 CalBear68 is offline
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Bing! - 03-30-2012, 10:40 PM



Watch that first step............ it's a doozy!


Nice guys finish lunch.
... Douglas Kenney (1947-1980)
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The Duke! The Duke! is offline
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03-31-2012, 05:25 AM

Tell him he must watch this clip. Especially around the 3:00 mark.

http://www.youtube.com/watch?v=4huaX0UAFGM
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mbBear mbBear is online now
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03-31-2012, 05:54 AM

I had some dealings with Farmers executives, and, though I don't know the business, I was really impressed with them.
I have a good friend (not with Farmers)who is very experienced in the field, and loves collecting friends on Facebook...if you want more info, message me!
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oskidunker oskidunker is offline
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Don't do it - 03-31-2012, 07:39 AM

I have been an agent for almost 40 years.It used to be a really good job. Over the past 10 years they have been cutting commisions, increasing quotas etc. 75% of new agents have failed . They generally require you invest 5ok to start and then want you to buy internet leads which do not work. Soon a new agent finds he is hugely in debt and leaves. the companies used to pay for your office, phone etc. Now they pay for nothing. With all the regulation in California they can't get the rates they need to be profitable so they take money away from you.I mainly live on renewals and plan to retire soon but for a new guy... get a job with a salary. Just my opinion.

Had a friend with farmers. They did not treat him well. Long time agent forced out.Even though they are a re casualty company they require you write a lot of life insurance to keep your job. Generally after they get a new guy to write all their friends and realatives, they terminate him and go on to someone else.

Last edited by oskidunker; 03-31-2012 at 07:46 AM.
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kiddynamite kiddynamite is offline
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03-31-2012, 08:47 AM

I've been an agent for years and I somewhat agree with Oskidunker. I would not sign a contract with any of the big three-State Farm, Allstate, or Farmers. I worked for Allstate for years before selling my book of business and going with a different company. However, I sold not because of being forced to write life, I did not like the direction of the company. They are now steering business to their website, 800 number, and Esurance (which they just bought) all of which does not lead to agent sales. I now work for a small company who treat their employees like family and offer a terrific retirement plan. I could not be happier. However, it is not an easy job for the first 3 years or so. Companies will hire warm bodies, throw everything up against a wall, and see what sticks. They don't care if you leave, the policies stay with the company.

If your brother has a chunk of change he may want to look at buying a book of business. He will walk into a fully operating agency with positive cash flow from day one.

Pros.
You are the boss. You can wear what you want to work. Nobody can tell you what to do. If you want to take the day off, take the day off. I live in Utah and golf twice a week in the summer/fall and ski twice a week in the winter/spring.
One can make a very, very nice living.
Job security. As long as you meet the yearly minimums (I don't know who Oskidunker works for but in my experience if you don't hit the minimums you shouldn't be working there anyways) or do anything unethical, your job security should be near 100%

Cons.
You are a 1099 employee. No benefits at all.
Payday is once a month. If you are not paid as earned, it can be very difficult to budget your finances. My checks after 5 years at big blue were between 18-25 k a month. It is tough when your monthly checks vary 7k a month.

Not all agencies are actively looking for new business. If there are 20 agencies in your district, probably 8 are looking for new business. I have found that everybody has their number. It could be 50k a month, it could be 3k a month. When they hit that number and are comfortable in their station in life, they stop prospecting and start living off the renewals.

As far as pay, I get 10%. Homes are one year, auto are six months. So if I sign you up for home and auto I will get 10% home and 10% auto. In six months when your auto renews I will get another 10%. Then in six months more (one year later) I get 10% auto, 10% home. That is what is meant when people are living off their renewals.

Most companies will push life insurance. The reason for this is retention. If you have one car only with me you are much more likely to leave me than someone who has home, auto, life, and a motorcycle. Those people just don't leave.

In my experience, all companies are going to be about the same price over a 10 year period. Where they are at any moment in time is another matter though. Look how the company treats its agents-not how competitive the company is in price. However, if he is starting from scratch, it is much easier to sign people up with lower prices.


Also, my best friend is a company benefit broker. He makes so much money he needs two wallets so he doesn't list to one side. He sells health insurance to businesses. His job is to schmooze. He golfs 3-4 days a week. He takes his clients to Alaska for salmon and halibut fishing, Wyoming for fly fishing, Jazz games, etc. The downside to that is it is a very competitive industry. There are only about 6 main health insurers in a state so everyone is selling the same product. The only thing that separates brokers is service.

Good luck to your brother.
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oskihasahearton oskihasahearton is offline
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The pay the premium and don't claim hustle...an adversarial relationship - 03-31-2012, 10:36 AM

Quote:
Originally Posted by oskidunker View Post
I have been an agent for almost 40 years.It used to be a really good job. Over the past 10 years they have been cutting commisions, increasing quotas etc. 75% of new agents have failed . They generally require you invest 5ok to start and then want you to buy internet leads which do not work. Soon a new agent finds he is hugely in debt and leaves. the companies used to pay for your office, phone etc. Now they pay for nothing. With all the regulation in California they can't get the rates they need to be profitable so they take money away from you.I mainly live on renewals and plan to retire soon but for a new guy... get a job with a salary. Just my opinion.

Had a friend with farmers. They did not treat him well. Long time agent forced out.Even though they are a re casualty company they require you write a lot of life insurance to keep your job. Generally after they get a new guy to write all their friends and realatives, they terminate him and go on to someone else.
It's all about $$$money, but it sounds like they've gone adversarial with their agents just like they do with their clients.

If the brother is good with numbers he should be an actuary; otherwise, he's just a hustler.


"You ain't got nothing if you ain't got swagger." __
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FingeroftheBear FingeroftheBear is offline
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03-31-2012, 11:08 AM

Seems to me successful insurance agents usually have good, natural people skills. You know, they're selling service that is mainly personal interaction and people usually buy from someone they know and/or like.

Insightful info from you industry pros.

+1 on good with numbers, consider being an actuary. A good friend became one right out of Cal and was well comp'ed but after 12 years went the kid route. Can't remember how many tests she took but it seemed like a lot but well worth apparently.

Last edited by FingeroftheBear; 03-31-2012 at 11:10 AM.
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kiddynamite kiddynamite is offline
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03-31-2012, 12:55 PM

One other thing. It is a sales job. 100% eat-what-you-kill. However, it is one of the better sales job. As you know, if you want to drive a car or motorcycle, or if you want to own a house you must have insurance. Some states require that off road vehicles be registered and insured also. That means jet skis, boats, atv's, and snow machines. In my opinion, it can be a very easy sale.
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petalumabear petalumabear is online now
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03-31-2012, 01:26 PM

Its a great lifestyle IF you are successful. My wife's family (3 brothers) owned an independent agency from the 1960's until 2004. They represented a number of insurers (i.e. Firemans Fund etc.) and lived the lifestyle described above once the agency was established. They always looked for new business and were selective in what they wrote once their business was established. In the late 80's/early 90's the firms started cutting commissions and agents based on size and profitibility. That has continued and that is why they sold out to a larger agency that was consolidating agencies to build strength and profitibility. Its a different game now.
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oskidunker oskidunker is offline
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Not an easy sale - 03-31-2012, 02:26 PM

You would definetly want to be a Broker, not a Captive agent. Hard to write a homeowners policy in California with some companies due to underwriting requirements such distance from Brush, Trees etc. Some companies are not currently writing homeowners policies in California. You don't want to sign up with one of those.Much scrutinization of homes in wooded areas.

As an example, My partner bought 100 internet leads and sold 2
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bar20 bar20 is offline
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03-31-2012, 03:40 PM

I have a friend who is also my agent. She represents Farmers Insurance and has been an agent for about 30 years with them. Over those years she has built up many customers. She told me when she wants to retire she can not sell her business to someone else. Farmers doesn't allow it. Basicly she just has to walk away without any compensation from Farmers.
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petalumabear petalumabear is online now
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03-31-2012, 03:46 PM

She should partner with an independent and negotiate a payout based on % of her business she converts. Then she can depart and leave Farmers holding an empty bag.
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brj1 brj1 is offline
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True empathy for your client - 03-31-2012, 04:39 PM

is still what separates the men from the boys. You can create loyalty by actually caring, it still works.
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SonOfAPappysBoy SonOfAPappysBoy is offline
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04-01-2012, 05:27 AM

Since I've been an independent broker for most of my 30 yrs in the industry I thought I'd comment. One question-is your brother's opportunity with an Independent Agent or as a company employed (called 'captive agent' elsewhere in the thread)? Is he better with people or conceptual/mathematical skills??

The 'eat what you kill' is very accurate and your brother can get good 'beginner' support and training from the State Farm/Farmers (see University of Farmers Adverts) of the world, and MAY be able to do that via an Independent. Either way he will need to learn the business, and build a following, to have the recurring revenue being described.

Also, all the other comments here relate to personal insurance, which (along with some small commercial business) is what Farmers and State Farm et al actually sell. I do only large commercial business and I enjoy the fact that I get to exercise other skills (I actually get to 'pretend'-unofficially-to know contracts/legal issues, financing/accounting and even actuarial science) beyond just sales. I would (personally) find individual sales pretty hard because, as another poster said, these are pretty similar products with similar prices over time. This is a pretty small % of the industry as a whole but allows for pretty good earning potential.

Last item-actuaries do very well financially. I think there are 3 levels still and you have to pass 8-10 very hard mathematical tests, but grads (with no tests) will look at high 5 figures very quickly and you have to do poorly not to break $100k once you get some test under your belt. The Associate level (1/2 way) and Fellow level (all tests) are always in demand (whether life&health or property&casualty side) and while they don't get equity unless they start or join as a partner somewhere it's about as close to guaranteed $200k annual as you'll find in a typical 'employed' situation.

Good luck to Bro...may the force be with him.
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