9 Insurance Agency Start-Ups: Why and How They Set Out on Their Own
What motivates people to take a risk in an industry dedicated to managing risk? New independent agencies are born of various circumstances. Sometimes it’s about seizing an opportunity that comes along; other times, it’s about creating something out of necessity. Sometimes it’s about being at the right place at the right time. Some new owners are familiar with the insurance business, even with the agency side, while others are complete rookies.
Those who have recently ventured out on their own offer advice and encouragement for those thinking of following in their footsteps. Owners should have a plan and plan to work hard. They should invest their money and time wisely — in technology and sales instead of a storefront or staffing. They should emphasize relationships and customer service. They should not expect to make a lot of money at first. Most of all, if the opportunity or interest is there, just do it.
In their willingness to share their stories, start-up principals are like veteran agents. What follows are tales from nine start-ups across the country — why and how they took a risk for success.
Brandon Thompson and Matthew Phillips, Millennium Brokers, Springfield, Missouri
Brandon Thompson didn’t have a background in insurance when he decided to open his own agency. A teacher and a coach, he had just finished his master’s degree in education leadership, but he was looking for something else. He’d always wanted to start his own business and felt like insurance would be a good fit. After all, “a lot of what we do is just educating clients on the different risks that things propose and helping them select the right coverages,” he says.
Thompson had saved what he felt was enough to give his plan a go. Within two weeks after telling his wife he wanted to open his own agency, he’d passed his agent licensing exams.
It was time to go into business, but he didn’t go into it alone. He teamed up with Matthew Phillips, who did have insurance experience. “He worked for an independent agent for a few years and then decided, ‘Hey, I’m ready to go out on my own. I’m sitting here building someone else’s book of business,'” Thompson said.
They didn’t know each other; they met through shared contacts. Thompson conceded that most people who open businesses together know each other at the outset. But, he says, “we’ve been very, very lucky.”
The pair opened Millennium Brokers in Springfield, Mo., in early 2017.
Their primary focus is personal lines although they do have some commercial accounts. So far, they’ve secured appointments with national carriers State Auto, Safeco, Travelers, Nationwide and Progressive, as well as Missouri-based Meramec Valley Mutual Insurance, to name a few.
Phillips previously had worked with some of those carriers, but they were also helped in securing appointments through membership in Valley Insurance Agency Alliance, a St. Louis-based affiliate of the national agency partnership organization, SIAA.
Currently Thompson and Phillips are Millennium’s only employees. “We’ve found a way to automate the agency where we haven’t really had to take as much overhead with employees yet, but we’re looking at adding some in the near future,” Thompson says.
Their website vendor worked with them to automate their processes, understand and utilize search engine optimization, and take advantage of Google resources for getting leads.
“We focused on creating a customer experience that was like no other agency. We do a lot of our business over the phone and we very rarely meet with our customers, so we understood that we had to map out our customer experience,” Thompson said.
“Over time, building that customer experience has helped us. We went from having zero reviews, in two years, I think we’re at 56 or 57 Google reviews right now. We’ve created an experience that we’re able to translate over to Google and we get so many calls now just based on someone going online and seeing the reviews we have,” he said.
Thompson had several suggestions for those considering launching their own agencies: One, realize it’s a marathon, not a sprint — new owners are not going to make a lot of money right off the bat.
Two, don’t waste money on an expensive storefront. He originally thought a good storefront location would attract a lot of walk-in traffic. “We found that we don’t. We actually switched locations after our first year.”
Three, owners should do as much as they can instead of paying a vendor because “the costs will start to creep up.”
Finally, invest money at first in marketing or developing lead sources, not on the latest technology. S. Jones
Mike Iverson, MD Iverson Group, Fairburn, Georgia
Mike Iverson had been with a large agency for 20 years before he decided to start his new agency in April 2017. The retirement of that firm’s CEO gave him the opportunity to purchase his book of business and sell stock options so he could fund his new agency. “The opportunity came for me to build my own brand and do business the way I really wanted to do business — be a small firm that packs a big punch,” he said.
That’s what he’s doing. “For us, it starts with the prospects — everyone isn’t going to fit. We aren’t trying to be all things to everyone. We are very honest with what we do and how we do it and have people drawn to us for that.”
Iverson and his staff of six concentrate on larger, privately-held companies and not-for-profits, but they also write personal lines as well.
Key decisions before launching included choosing the right IT system, designing a website, setting up a commissions structure, and making sure employees commit to providing the client experience his company promised.
“All of these things and the messaging that goes with it and how it represents you and your brand, requires you to wear a lot of hats in a short period of time,” he said. “It’s exciting, but also like drinking from a firehose. It feels like you are eating an elephant, but you just have to do it one bite at a time.”
He said he also learned a lesson about attracting new business. “Over the years I’ve considered myself … client centric and never asked for things, but I think I missed out on the opportunity for them to contribute. Clients want to help us succeed if we have helped them succeed,” he said.
His advice for others is to have a game plan, build a network, get involved with the Big “I” and be true to what you want for your company. A. O’Connor
Deirdre Rushin, Imperial Insurance and Financial Solutions, Durham, North Carolina
When the opportunity to start her own independent insurance agency came knocking, Deirdre Rushin quickly opened the door and got to work. Now, just six months later, she is pleasantly surprised by the “overwhelming” response from clients and the number of referrals they are sending to her. She is already looking to add staff.
Rushin’s opportunity came when the life insurance-focused carrier she was working for decided to stop writing property/casualty insurance business after trying to do so for two years. Rushin was asked if she would like to purchase the P/C book of business.
She used all of her savings to get her business — Imperial Insurance and Financial Solutions — going and began operations in September 2017 offering life, short-term medical, financial planning as well personal and commercial lines insurance.
Rushin started as a State Farm agent and has been in the industry more than 10 years, including her stint with her previous carrier.
She said that because she already had relationships with carriers from previous roles, she had no problem securing contracts and switching her policies over.
“I am really excited now to be the CEO and running my own business and doing what I love, which is helping people meet their needs through insurance,” Rushin said.
The biggest expenses for her were acquiring office space, obtaining the necessary insurance for her company and the agency management system.
She said she is being conscientious about how her customers want to communicate and offering multiple options.
“You have to be flexible and meet your customer where they are. You can’t do one fix for everyone,” she said. A.O’Connor
Jake Holehouse, HH Insurance, St. Petersburg, Florida
Jake Holehouse decided to start his own independent insurance agency after his family’s nearly 40-year old agency located in Florida sold to a national firm back in 2015. He stayed on with the national firm for a year, then spent a year and a half with Florida insurer Heritage Insurance when he realized there was an opportunity to “do something different.”
“I looked at a lot of agencies across Florida and the Southeast and saw an opportunity at rethinking the independent model,” he said. “A lot of agencies just aren’t competing for new business like we are.”
He opened HH Insurance last June and has already moved into an office in St. Petersburg and hired 12 employees who focus on specialty markets, personal lines and coastal businesses.
The planning was intense. He spent several hours every night with his father, with whom he started the new agency, for about a year and a half, figuring out how they would do things differently. They came up with a 200-page business plan and then invested in hiring and training staff.
They also invested heavily in technology, including giving up on the first management system they used after six weeks in favor of something better.
Holehouse said the agency has grown thanks to its business model, which focuses on customer service, customizing policies and educating clients. “We are taking the time to understand the insured and taking the time to have a thorough conversation with them, but at the same time we are still being time sensitive and meeting the time needs people have in the 21st century,” Holehouse said.
“The challenges change by the day. Take how much you think it’s going to cost and double it because things pop up and you don’t want to skimp,” he said. A. O’Connor
Daniel Rohrbaugh, Raleigh Insurance Group, Raleigh, North Carolina
Daniel Rohrbaugh started his career as a State Farm agent but realized after nine years that going independent was a better option. So he connected with the Independent Insurance Agents of North Carolina (Big “I”) and began conversations about how to start an agency.
The big day came on March 1, 2017, when Raleigh Insurance Group opened. “I didn’t go to the bank. I borrowed from myself and took baby steps and kept on producing and grinding,” he said.
He is writing all the business himself without any staff. The agency’s 250 customers thus far break down as 80 percent personal, 20 percent commercial.
It has taken him awhile to figure out the independent agency system, the getting of carriers and placing of business. “With State Farm I was in a bubble,” he said. “That learning curve was very steep. I had so much to learn, but now that I am finally getting settled and learning the independent model we are really taking off.”
He’s proud he has done it all without “taking out a lick of debt.
He has been pleasantly surprised by how much other independent agents have helped him. “We are all just business owners trying to serve our customers and write business. You don’t realize how much the independent space helps one another,” he said.
He said others starting an agency need to know what they are good at. “If they are a salesperson, they need to be the main salesperson for the organization. They need to find resources or outsource the things they aren’t so good at [and] focus on what got them there — they don’t have to be great at everything,” he said.
He expects to double his business in the next year and eventually have a full staff. A.O’Connor
Greg Varypatakis, White Birch Insurance, Chicopee, Massachusetts
“There’s something that is very liberating about working for yourself that allows the passion for what you do to come out in every aspect of your work,” said Greg Varypatakis, partner at Chicopee, Mass.-based White Birch Insurance.
Varypatakis opened White Birch in 2017 with a partner after working for three years as a captive agent. “Along with my partner, we began researching our target markets and the insurance carriers that allowed us to be versatile and competitive with the majority of prospects,” he said.
The agency is self-financed and sells auto, home, life and commercial lines. It currently has five employees. Its carriers include Plymouth Rock, Mapfre, Quincy Mutual, Safety, MetLife Auto & Home, Preferred Mutual, Foremost and a few flood insurance options.
“I have ideas of where the company will be in five years, but I think the wisest thing to do would be to keep paying attention to the industry and do our best to get ahead of certain trends that will allow us to be competitive in any type of market,” Varypatakis said.
The agency is taking advantage of technology. “We felt as though it was wise to invest in great software, knowing we’d be grateful for it in the future,” he explained.
Start-up agencies must remain available to customers when needed. “I think with any business, your hours are 24/7, at least initially,” Varypatakis said. “Our stated hours are Monday-Friday from 9-5, but you can find someone in our office working at almost all hours of each day.”
Varypatakis emphasized the rewards of owning an agency. “There’s never a great time to make the plunge if you are comfortable where you are,” he said. “If you thrive on being uncomfortable, you likely won’t ever regret taking the reins by yourself and having final say in the direction of your business.” E. Blosfield
Michael Cooper, Omega Insurance Group, Lincoln, Nebraska
One of the first things Michael Cooper did when he launched his independent agency, Omega Insurance Group in Lincoln, Neb., in September 2018 was to invest in technology.
That was the opposite of what other new agency owners he had talked with had done, but while other startups concentrated on just trying to make money at the outset, Cooper felt it was important to get the agency set up with automated systems, a website and other appropriate technology from the get-go. He concedes he may have overspent but believes that the investment will prove to be worthwhile. “Everything we’re doing right now will make it easier for us three years from now,” he says.
Cooper is not new to the insurance industry. He began his career as a Farmers agent in 2006 and spent seven and a half years on the captive side of the agency system. Then, after working four years at an independent agency, he was encouraged to go out on his own.
The independent agency he worked for had been housed at a credit union, which referred business to the agency. When the former agency owner and the credit union decided to part ways, the credit union asked Cooper to open his own agency.
While he continues to get customer referrals from the credit union, Cooper also kept some former clients as well. He also has relationships with other mortgage companies that refer business and is active in networking groups.
The agency concentrates on home, auto and life insurance, and some commercial. In addition to Cooper, there is one part-time customer service representative. Plus, “I’ve brought on four other producers with me, as well, that work under my umbrella,” he says.
The group represents Travelers and Progressive, companies Cooper worked with before. It also writes business with AAA, MAX Mutual, Battle Creek Mutual, Grinnell Mutual, among others.
Cooper believes the relationships he maintained throughout his career helped him get appointments with carriers.
“I’ve written a lot of Travelers business so getting that contract was fairly easy,” he says. “Honestly, I think, I’ve been in the business now for 13 years. I call these people up and I just say, ‘Hey, here’s where I’ve been and here’s what I have to offer you. Here’s what I know is going to happen, and here’s what I’ve done so far.’ And I just think people were willing to take a chance on me.”
Cooper and his wife were prepared for him to not bring home any money for the first few months. “She’s been supportive the whole time and so that’s probably has been what’s made [the transition] the easiest so far,” he said.
He and his team have taken pay cuts but feel they will be better for it in the long run. S. Jones
Zachary Patten, Oak Grove Insurance, Canton, Massachusetts
For Zachary Patten, the biggest challenge to starting his agency was transitioning from serving in an operations role throughout the beginning of his career into a business development role in owning his own agency.
“I have to go out and get people on board with providing referrals and bringing business through the door,” he said.
With this in mind, his advice for new agency owners is to never be afraid to ask for help.
“You have to really understand what your strengths are and where it is that you need help, because no one is great at everything,” he said. “Wherever it is that you need help, there will be resources or other folks in the industry that can help you with that, so just start reaching out.”
Patten is the sole owner and operator of Oak Grove Insurance, which opened in 2018 and provides home, auto, motorcycle and boat insurance.
“We have standard business hours of 9-5, but I find that a lot of transactions occur outside of that time frame — mostly in the evenings — because some of the folks that we work with are busy professionals, and they need that assistance at a different time of day,” he said.
In the next five years, he is aiming to establish a retail space, build a staff and grow in personal lines while adding commercial lines. E. Blosfield
Aaron Levine, LG Insurance Group, Long Branch, New Jersey
Aaron Levine, founder and CEO of LG Insurance Group in Long Branch, N.J., opened his agency in 2009. The agency has since grown to seven employees, serving many other local towns throughout Monmouth County, including Asbury Park, Eatontown, Little Silver, Middletown, Ocean Township, Red Bank, Rumson and Shrewsbury, as well as Long Island, N.Y., and the Greater New York City area.
Although the agency is working to increase its automated correspondence and its use of technology to make standard business procedures easier, Levine cautioned against relying too much on technology.
“People do business with other people for two reasons: 1. Ease of use and 2. They have to like who they’re doing business with,” he said. “We try to make it easy for our customers and our prospects to do business with us, and we also try to make sure that they’re happy doing business with us. But at the same time, we’re moving back to some more traditional marketing methods.”
According to Levine, this means returning to mailing hand-written letters, thank yous and birthday cards, as he believes personal touch is going to be the key to standing out in an increasingly automated insurance world. Indeed, Levine emphasized the importance of relationship building and community involvement for new agents.
“I think the role of the independent agent moving forward into the next couple of years is going to be community-based, relationship-based,” he said.
His advice for new agents is to “stay in your community, really research and do whatever you can to help people out. New agents will find success, albeit slow, if they really stay focused on who they can work with.”
Levine added: “Understand what you’re talking about, and if you don’t know, ask somebody and somebody will be able to help you.” E. Blosfield