Florida Welcoming New Latin Independent Agents, While Still Coping with Old Market Problems

Being an independent agent in south Florida means never having enough property markets.

That was true years ago and remains true today, according to a leader among south Florida agents, Joseph Mier, who is the incoming president of the Latin American Association of Insurance Agencies, which is based in Miami.

But the perennial scarcity of property markets has not kept entrepreneurs from wanting to become local independent agents, says Mier, who says he sees new agencies starting up even in today’s economy.

“I am so surprised. The amount of people who have left real estate, people from banking … they were very comfortable at what they were doing and then all of the sudden they say, ‘Let’s try the other end.’ So we have seen a tremendous amount of small agencies springing up.”

Helping new agents is one of the joys of being involved in the association, Mier says.

“They’re like lost puppies. They really don’t know where to go. They find us and they start networking with agents, and they start understanding. A lot of agents will do mentoring with them,” he said. “Then of course being able to make connections with companies that maybe they didn’t even know were out there, giving them markets. It is rewarding to see an agency throughout the years, a start-up agency as they grow and they progress.”

Mier’s Own Story

Mier understands the appeal of being independent, as well as the challenge of being a new agency trying to find carriers to represent.

Like many south Floridians, Mier is originally from Cuba, although he also had a stopover as a kid in Bridgeport, Conn. before his family located permanently in Miami.

He entered insurance in 1976, starting as a life agent with Prudential before migrating into property/casualty with Pru and then with Allstate. He was an agent for Allstate at a Sears store. In October 2000, he sold his Allstate business and went the independent agent route. “[A]t the time with Allstate it was difficult because we didn’t have access to property markets at all. It was very difficult for the agents. I decided to give the independent agent side a shot. It’s been very good to me,” he told Insurance Journal.

Back in 2000, insurance was in a hard market but Mier was still able to line up carriers for his new agency, starting with Travelers. He has since added Safeco, Progressive, Mercury and others for personal auto.

The property market, even back then, was tough, with state-backed Citizens Property Insurance just about the only game in town. But slowly he was able to get other companies, beginning with American Strategic, then Southern Fidelity, then Universal Property and Casualty. “Little by little our book grew with some of these smaller companies,” he said.

Today, Mier’s Allstar Direct Insurance and Financial Services includes a retail agency in north Miami and an Internet presence that promises customers online quotes on personal and small commercial lines. There’s even a toll free number to call. “We combine old fashioned service with cutting edge technology,” says the Web site.

His northern Miami location serves what he calls a “very diverse” clientele that is far from exclusively Latino. Only about 30 percent of his business comes from Latinos. “You have a lot of Europeans, there’s a lot of French, there’s a lot of Haitian folks in this area, a lot of Latinos. So it’s a very mixed area,” he said.

Capacity Solution

Lack of capacity has been a problem for south Florida agents ever since Hurricane Andrew slammed the state in 1992 and it’s likely to remain a problem, Mier believes, until the federal government gets involved.

“I don’t think that we’re going to have a real solution to the Florida property market until there is a national program similar to what they did with flood,” he told Insurance Journal.

“All we’re doing, we have a huge, huge wound and we keep putting band-aids on it. We’re always thinking that this band-aid is the one that’s going suture it up and fix it and it’s not going to happen. It’s never going to happen.”

There is an ongoing debate whether property insurance rates for Citizens, frozen since 2006, and those of private insurers in Florida, are adequate. State Farm says it is leaving because the state would not approve rate hikes, although Insurance Commissioner Kevin McCarty claims that the insurer is really leaving because it is overexposed in the state. New legislation will raise rates charged by Citizens while another bill to deregulate the rates that large carriers including State Farm can charge is on Gov. Charlie Crist’s desk.

Mier is sensitive to insurers’ need to have adequate prices but also to the plight of consumers. “I’m sure that it’s something that has to be done. Probably Citizen’s wasn’t priced correctly; they’ve had a freeze. …[I]t’s going to be another burden on the citizens of Florida because the way the economy is, it’s just another additional burden on them. Any time you raise rates or taxes, it’s a burden on our customers,” he said.

Mier is also concerned that rate increases could further harm the state’s real estate market, which has shown signs of improving but remains among the top in foreclosures in the nation. “Now if companies are allowed to charge whatever they feel they want to charge in the state of Florida, that could possibly open up more markets. But by the same token, is it affordable? What is it going to do? Is it going to hurt the real estate market?” he asked.

Mier says personal auto and workers’ compensation in Florida are working just fine but the property challenges carriyover into commercial lines. “Florida’s such a huge state, where you have markets in central Florida and northern Florida that are not available to the agents in south Florida, whether they’re Anglo, Latino, whatever. There’s a lot of companies that will not write general liability in south Florida. They just don’t want to do it here,” he said.

Language Barrier

The majority of LAAIA’s membership is in south Florida—in Dade, Broward and Palm Beach counties. Mier thinks the reluctance of some companies to do business in south Florida is due to their mistaken impression that they must speak Spanish to succeed in the region.

“I do know that sometimes … and I’m not just trying to speak about insurance companies but maybe inspection companies, wind mitigation companies, companies that are insurance-related in some way… and I’m trying to see if they’ll if they’ll come down to our trade fair or our convention and they’ll say, ‘But we don’t habla espanol.’ And I say, ‘You have to understand, we’re communicating in English. All our business is conducted in English down here.'”

Dispelling the myth of a language barrier is one of the challenges he will face in July when he takes over from Nestor Rivero as president of LAAIA at the group’s annual meeting at the Westin Diplomat in Hollywood, Florida.

As president, he’d like to see LAAIA grow by taking advantage of interest shown by other Latin agencies across Florida and in other states. “Right now, the majority of our member associates are in Dade County. We’re having a lot of success growing into Broward County, which is our adjacent county. And there’s a lot of interest in the mid-section of the state, to have a chapter there, and in the Orlando and the Tampa areas,” he said.

“We even get calls where they want to start chapters in places like Texas and Michigan and different areas where you have emerging Latino populations.”