When you are employed with a captive agency you are held captive, and discouraged from growing outside of their system.
You may have non-compete agreements, non-disclosure agreements, and overly complicated or undervalued commission structures. These issues are addressed in our "Opening An Agency" webinar and you can find a link for it HERE.
The Entrepreneurs Insurance Agency is founded on the belief that the traditional agency model must be disrupted in order for the industry to grow and maintain value with the upcoming generations who are quick to switch to technology based options.
If you are working as a producer within the GEICO system then this blog is for you. This blog will detail our co-founder's experience working for GEICO and how EIA can work with you in order to help you break free of the insurance cycle and open your own agency.
HOW TO OPEN A INSURANCE AGENCY
There are more blogs, websites, and YouTube videos that cover this topic than we could ever dream of producing. However, we have experiences that we would like to share and we hope our knowledge will help you make informed choices.
STEP 1: BE THE EXPERT IN YOUR FIELD
It will do you no good to open an agency if you are only a few months into a career in insurance. Underwriting guidelines, billing issues, service work, solicitation calls, employee management, etc. are all things that you need to know on top of having the ability to bind insurance policies. You have to become a stand out in your community and unfortunately it is all too often that captive agencies hold their employees back from greatness.
Captive agencies hold their employees back from greatness.
Ask yourself; when was the last time your agency owner encouraged you to get out from behind the desk and go eat lunch somewhere local? When was the last time your agency owner encouraged you to go live on Facebook and give away a gift card to a local small business? When was the last time your agency owner encouraged you to do anything that would expose your face to the public and not the agency owner's face or the carrier brand's logo?
It was our experience working at a local GEICO GFR office that the business model was to call and churn as much business as possible over the phone and rely, nearly exclusively, on GEICO corporates advertising. We also were somewhat misleading in the fact that we encouraged prospects to "buy local" and "use a local agent" even though we did no servicing, endorsements, or other "agent" type work.
Hear me out, I believe this is the way of the future; however, it was slightly unsettling to lead people to believe they could come in and speak to "an agent" when they had a problem. We transferred every call to a service center. In person needs were met with a lobby phone for them to call a service center.
Captive agency owners' job is to make themselves money at the expense of opportunity for the producers they employ.
STEP 2: SEIZE THE OPPORTUNITY
If you have the opportunity to open your own business - insurance agency - then you have to take it. You cannot wait for the right time. There is never going to be the perfect time to open an agency. You are never going to have enough warm leads. You are never going to have enough community exposure (see step 1). You are also never going to know how to run a small business; even if you are an expert in insurance.
When the opportunity presents itself, understand that it will look like hard work but you have to seize the moment, capture it, and do not let it get away. Your agency owner will likely be upset that you are taking the opportunity to grow outside of their system. Often times, producers have more practical experience than the owners themselves so it makes sense for a producer to seize the opportunity to open their own insurance agency while they are young, eager, and passionate about making a career.
Be aware, your non-compete agreements, captive agreements, non-disclosure agreements, etc. can impact how and when you decide to become independent. HERE are 4 tips from Nationwide Insurance about transitioning careers under a non-compete agreement. As you can see from those tips it is very possible to transition. Typically you are not allowed to solicit clients, work for a different agent under the same brand, or advertise in a specific geographical location. Keep in mind, in general, non-compete agreements cannot hinder your ability to earn a living in your career field.
EIA strongly suggest seeking the advice of legal council if you feel your non-compete will stop you from growing beyond a basic producer. However, THIS is an article about common mistakes in non-competes that make them generally unenforceable.
While working with GEICO we were allowed to broker business through the GEICO approved independent carriers. These included Stillwater, Foremost, and American Modern; however, it was often times the case that we were not competitive enough on the home offering to secure the bundle account. Savings on the auto policy were often times negated by the increase in home premium or the loss of home + auto discounts with a clients current carrier.
GEICO GFR offices are not traditional independently owned books of business, so you if you sticking around hoping to "buy out the owner" in the future make sure you do the research to make sure that is a feasible option and that GEICO will not look for outside investments to purchase the book of business.
Seize the opportunity and work around your non-compete agreement at your own risk; but, without risk there can be no reward.
STEP 3: PLAN A CLEAR PATH TO SUCCESS
When you look at the GEICO business model it is simple to identify where there is room for a producer such as yourself to create a path to success and work towards opening their own agency.
Correct me if I am wrong (and I am sure you will); two strong points of working as a GECIO producer are the ability to write auto insurance policies with competitive pricing options due to the many tiers inside the company - meaning standard and non-standard are all taken under the GEICO name. Also, GEICO provides a near endless stream of leads from the corporate site due to their large advertising budget. These leads are "warm" and the closing ratio is fairly high compared to other carriers.
However, there are cases where auto policies are not competitive with independent companies like Safeco, Progressive, or Sate Auto. Add to that that a new survey has shown that 90%+ of Americans no longer answer ANY unknown number and the warm leads are rendered nearly useless.
So, here comes EIA to the rescue.
With the EIA platform you can leverage your existing license to quote and facilitate the sale of brokered policies in your state that are outside of the GECIO appetite guide. But, your contract does not allow you to have other carrier appointments?! We understand; at EIA we have created a platform that is intended to help producers transition to become true independent agency owners while clearing the traditional hurdles that have plagued the insurance industry for years.
EIA has a Silver package that is designed for the GECIO captive agents. This package does not issue any carrier appointments and the binding of policies is handled by EIA representatives in the United States or by our partner company Answer Financial and their servicing centers located in the United States. Combined, EIA + AF have 400+ licensed agents that will facilitate the binding of policies after you have completed the quote and counseled your clients through the process of finding affordable polices that meet their insurance needs.
STEP 4: USE THE PLATFORM
The plan is simple; identify the clients that do not fit your standard appetite guide for your carrier. Once your carrier declines the risk or is priced too high to be competitive, then you use our comparative rater software to check rates on all available carriers in your state. Find the best prices, work through the best coverages, and decide on a policy for your client. Then, simply conference call one of our servicing agents who will bind the policy instantly. You receive a portion of new business commission and renewal commissions each term. It really is that simple to begin to create your own book of business with leads that would walk out the door otherwise.
After the sale, EIA + AF will handle all servicing, endorsements, and yearly touch-points for the client. It becomes hands off for you at that point. EIA will implement the re-broker™ technology every term to ensure that each client maintains the lowest premium prices available for the policy limits you presented them; thus increasing retention.
We found that many times GEICO GFR agents were referring homeowners policies to other independent agents to create verbal agreements in order for GEICO to obtain the auto policy and the independent agent to obtain the home policy - ultimately moving the business from the current carrier such as State Farm or Allstate. Stop referring the business out of the office and start building your own book of business today.
We also found that this practice was done "without the knowledge of the GFR owner". However, there seemed to be an unspoken understanding that the auto policies were what was most important to the GEICO GFR business model.
WHAT IS INCLUDED IN THE SILVER PLAN
The Silver+ plan with EIA gets you access to:
Carriers Quoting In Your State
Comparative Rater Software
Commission Share + Renewals
E&O Insurance Coverage
EIA Corporate Email Account
Training & Education Webinars
No contract, no obligation. It is time to break free of the captive barriers that are holding you back and begin to create a career for yourself, your family, and your financial future.
We are not telling you to disregard your non-compete agreements. We are not suggesting that you quit your job tomorrow.
What we are suggesting is that you take a long hard look at your future in insurance and ask yourself:
Is this my career or is this a stepping stone to my own independence?