Good career? I have no insight to offer him.

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

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

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!

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.

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.

oskidunker;731817 said:

---

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.

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.

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.

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

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.

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.

is still what separates the men from the boys. You can create loyalty by actually caring, it still works.

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.

Along with what the others have said, people skills are paramount. The product is secondary. If your brother can sell then he can sell anything. If he can't sell, he can't sell insurance. When I worked in financial services I often felt that people tried to sell clients insurance they didn't need because the commissions were good so that's something your brother will have to consider.

dajo9;732147 said:

---

Along with what the others have said, people skills are paramount. The product is secondary. If your brother can sell then he can sell anything. If he can't sell, he can't sell insurance. When I worked in financial services I often felt that people tried to sell clients insurance they didn't need because the commissions were good so that's something your brother will have to consider.

---

Are you talking about cash policies?

I guess the question is how is it working with an independent agency (how do you get a job with them too) and how hard would it be to establish one on your own then? Seems like being a captive agent is not really good way to go. He's in the very early stages and has not made any commitments.

Basically he got offers to interview at Farmers and Aflac so he asked me to inquire to the alums on this board.

Mostly retired now but I have a background in law, banking and management consulting and I dabbled in commercial property/casualty insurance. I think commercial property casualty insurance is really interesting. If I had to do it again I would probably opt for management consulting along with property/casualty insurance. Almost every business MUST have this insurance. As was pointed out above it is critical to know your stuff, be a good people person and cultivate not only clients but referral sources such as bankers, accountants, attorneys, etc. as well as health insurance brokers and personal property and health insurance brokers. It is impossible to have a professional command all of the different kinds of insurance.

If memory serves me correctly I think either the University of Kentucky or Cincinnati have a strong insurance program as well as The Hartford Insurance Company.

ps. Commercial insurance has larger premiums and far fewer brokers.

Hope this helps.

GO BEARS!

Both Georgia and Wisconsin have highly recognized Risk Management majors. Fertile recruiting ground for brokers, insurers and companies looking to hire risk management/insurance professionals...

I am on the corporate benefit consulting side. His interviews are from completely different sectors, and i could not help you on the first. On the Aflac side, or any supplemental carrier, he should only use it as a traiing ground and move on. There are 60 thousand of those guys for Aflac alone, and most dont know anything about what they are selling. It operates on a multi-level basis, so the managers and upper managers get a piece of the pie if the guys below them sell anything. If you are in those positions, great. If not, you are simply feathering somebody elses nest. Also, these are products that are typically sold to lower wage individuals on a one on one basis. A lot of bad apples sell these products, so he needs to know at the cocktail party he wont be the most popular guy.

As far as getting into an independent arrangement on the benefits side, the future has been looking bleak. Fewer people have been going into it because of long term threats from legislation, both at the state and federal level. The good news is that there is very little young talent. If I was going to go in now, I would probably look to join an ancillary carrier (UNUM, Prudential, Guardian, etc.) on the life and disability side. Its a great training ground, and if he has any personallity, smarts and a pulse, an independent agency would snap him up quickly.

Well he's not young... early 40s and he's looking for a career change. So I don't think he's willing to go back and get a college degree. He has a business degree and a MBA. Not sure how that applies to this field in general so I appreciate any help on this. This field is so out of my realm of familiarity

Agree. When I came out of Cal I went to work for MetLife in the group department managing large business accounts. I worked for carriers for 15 years, and then 9 years ago opened my own brokerage. I would definitely NOT work for Farmers or Aflac - I would call the folks at UNUM, MetLife, Standard, Hartford, United HealthCare, etc. for a job working in their group department on sales or service. Or else go to the consultant side at Marsh or Aon or Barney and Barney or somewhere like that. The individual sales job is tough and a grind. You can make a living on the group side while they train you.

If you are good and a good sales guy, you can make huge money on the benefits side. Future legislation is a problem, but the fact is that people are going to still pay consultants to tell them what to do, etc.

Actuary is a great job also, but very tough. I think there are something like 2300 actuaries in the country. Very small group...because the tests are quite hard. But once you are in, you are golden.

The other thing I would say is if you are going to be going into a sales job like that, you may want to consider looking at someone like Merrill Lynch - those jobs are also smile and dial, but there is a lot more upside if you do well.

Brainsmile;732380 said:

---

Well he's not young... early 40s and he's looking for a career change. So I don't think he's willing to go back and get a college degree. He has a business degree and a MBA. Not sure how that applies to this field in general so I appreciate any help on this. This field is so out of my realm of familiarity

---

Well, if he opened his own agency he would be the very definition of a small business owner. He will be responsible for every aspect of the business-location, marketing, hiring/firing, payroll, purchasing, and maybe even accountant and janitor. Its his show. He can run it like he wants.

A couple of things that helped me is to know my market. When he first get started they will want him to write down 100 people your brother knows and then go solicit them. I refused to do this. I figured my personal relationships were my personal relationships and I did not need to venture into that territory. Doing business with family and friends can get pretty complicated, pretty fast. There are ways to let them know that you have had a job change and this is what you do without asking them directly for their business.

You might be competitive in the homeowners and not so competitive in auto. Furthermore, within the homeowners segment you may be most competitive in 10 year old or newer houses. Go after that market. While you are writing their homeowners try and get the auto as well. You may not be competitive in either homeowners or auto. That will force you into going after the specialty markets-atv's, jet skis, motorcycles, etc. You can set up a booth at the outdoor shows or go to dealerships to try and get the business. Again, write their home and auto while you are doing their specialty lines. You have to play to your strengths.

I personally think internet lead work. I have had pretty good success with them. But, I am not in California. California is one of two states in the country that does [U]not[/U] use credit for underwriting purposes. They have determined through actuarial analysis that people with better credit file less claims. That does not mean they are better drivers or homeowners but that they simple file less claims. In the world of insurance companies, thats what it is all about. I have been in this long enough to tell you that this is true. People with crappy credit are always filing claims, always paying late, and always calling you with some excuse or another as to why the payment is not in. So, for example, two identical twins living at the same address, with the same vehicle, with the same marital status, with the same driving history, can pay vastly different premiums strictly based on credit. If one has pristine credit and one is coming off a BK, the one with a BK will pay about twice as much as the other.

I keep a spreadsheet that has every piece of business I have written. It has, in addition to names and phone numbers, zip codes, type of business (home, auto, etc), how many items, and where the business came from. Did it come from a referral, yellow pages, internet lead, cold calling, walk-in, knocking on doors, trade show, direct mail, etc. After a couple of months he should be able to tell where most of his business comes from both from a geographical and source standpoint. Then he can tailor his marketing to that area.

After every piece of business that I write I send out a thank you card. I even do it when my long time customers and simply adding a car. It is a lot easier to keep a customer than to get a new one.

Finally, one more oddball piece of advice. I don't know what his marketing budget is or where his office location will be, but if he can afford it, get a time and temperature sign. It will run several thousand dollars but it is a great passive marketing tool. I have my companies name and my phone number above and below the time and temperature. I don't even have my name-that's not important-but my companies name is. There are thousands of signs in my town and people drive past them every day and don't even notice. But there hasn't been one person who has ever driven by a time/temperature sign and not looked at it.