I’ve been at CoVerica since 2003 and I’ve seen many agent producers walk through our doors for their first day. Bright eyed, cautious, apprehensive, but excited, they start their first day and quickly realize that what we said about being different in the interview process wasn’t a lie. With that said, here’s seven reasons why you might be selling insurance for the wrong agency.
Chances are you signed a non-compete when you started working at your insurance agency. We require a non-compete at CoVerica as well, but ours look a little different. They have an exit strategy. We talk about and plan for what happens if you want to leave or go start your agency and we even lay out the terms to buy your book of business from us if you want to head down that path. At CoVerica, after 5 years in most cases, our producers OWN 50% equity in their book of business. We feel that this really is the corner stone of CoVerica and something that makes us unique. This keeps us accountability to each other. Most agencies are setup that if they terminate you, they gain control of the entire book of business leaving you to go restart your efforts somewhere else. Unfortunately, a lot of agencies THIS is their business model. Hire agents, have agents sell a ton of business, terminate agent, book of business because all profit since you don’t have to pay the producer renewal commissions. I have met an agent, that over a 20 year career, has had to “start over” 5 times. If for some reason, either us or our producer decide to part ways, we can buy your 50% of your book from you or you can buy our 50% to go start your own agency or join another firm with a book of business.
Something I see from new producers is they ask why we don’t have doors or locks on any of the desks at CoVerica. Even our CEO and our President do not have doors. Prior agencies that our production staff have worked for literally had “thieves on the floor” who would raid desks and computer systems looking for leads. We have a zero tolerance policy at our office for this behavior and honestly, if you’re working at a place like this, this is a significant point of failure on behalf of management. No one should be subjected to outright theft of clients, prospects or anything else you’re bringing to the agency. There is PLENTY of business to go around and rarely do agents actually bump into each other.
I am a data nerd when it comes to metrics. I think the more you understand a data set, the better you can serve your client base. Producers routinely ask management or myself for metrics on their book of business and we always deliver along with tips on how to expand and improve their performance. I know not agencies are like this through. I’ve consulted for agencies that lock their producers out from running their own reports or simply do not offer a mechanism to get even the simplest of numbers on their book of business. We feel that you’re an entrepreneur in our model here at CoVerica and smart business decisions are made utilizing smart metrics and reporting. Ask your agency to provide you with a PIF retention count, a lost business report, or a book value report once a quarter… if they clinch up or defer or even ask “why,” take that as a warning. Something isn’t right.
We understand that service departments can have some turnover from time to time but significant turn over causes instability in your book of business. You should realize, you’re building something of value (as long as you have some kind of equity in it – see point #1 above) and if management is constantly changing your support partner on your book of business, they’re not making life very easy on you are they? If you feel like you’re doing your own support for your book of business, I know some of you are by design, I would be cautious about staying at that agency long term.
This is always a tough one because what is “too many meetings?” I know we’ve ranged from way too many to not enough at our agency but we feel like we’ve been in a good spot for the last few years. We routinely have a sales meeting at the same time, same place, that starts on time and ends on time to discuss sales and market issues you and your peers are having in the agency. Outside of a once a quarter agency wide meeting or a yearly planning meeting, that’s really about it. Less than an hour a week. No carrier meetings (unless you want to join in on one, a smart idea if you have volume or issues with a particular carrier), no micromanagement meetings talking about why your life quotes aren’t in line with your home and auto quotes, and no meetings that feel like a waste of your time. You’re an agent. Your time is better spent prospecting for that next lead source or helping a client protect their family or their business, that’s what you should be focused on each day.
I’ve seen agents that are HIGHLY successful be completely choked by a sales leader who can not lead a team. Agents should be treated like a entrepreneur in their insurance production career. That comes with some flexibility. We think that the production roles, specifically those that are known as “outside producers” or people that make and find their own leads, should come with some autonomy and I know of a dozen agencies that write up their agents for the most ridiculous infractions. This is a RESULTS ONLY business and production staff should be managed that way. At CoVerica, we’re not concerned with anything other than if you’re treating your clients right and that you are writing the “right” kind of business.
Of the seven, this is the biggest one. Most agency businesses are building to sell. That is, the owner(s) of the company is building the agency in an effort to sell or merge to another firm. The owner(s) will get a huge payout and all the staff will be folded into the new company. Don’t worry, you’re going to get promised that “nothing is going to change.” Spoiler alert, it will always change. Unless you just happen to get acquired by CoVerica, change may not be a good thing. Once acquired by a large national agency or brokerage, management will completely turnover or be consolidated, customer service reps will leave to work at the smaller agency to just repeat the process, and your commission schedule and “deal” as a producer will completely change or be renegotiated. Want to leave, there’s the door, but you likely do not have equity in your book of business so they’re going to wish you luck in starting over. If you start to see the signs of a buyout, proceed with caution. Tell-tale signs of this are consultants visiting the office, expense reports being cut or tightened up, and service staff consolidates down to extremely stressful levels. These are all measures which aim to reduce expenses which increase the multiple that the agency sells for. If you want to learn more about this look up a number called EBITDA, or Expenses Before Interest, Taxes, Depreciation, and Amortization. This is the gold standard metric that is used to judge what an agency owner can “cash out” to a larger firm. We know this because we’ve seen time after time that an agency sell to another agency and promise that “nothing will change.” If you hear these words, be careful!
When we buy an agency, we’re always up front with the incoming staff. We run things differently, chances are, it’ll be better than the place you came from. But, if at any time you feel like this isn’t the place for you, we’ll help you locate another agency or firm to work with.
At CoVerica, we built something in 2016 called CoVerica 40. It’s a road map designed so that our agency can’t be bought or sold for 40 years as long as we maintain a marginal rate of profit. If something happens to our owner, Mike Sterlacci, the CoVerica 40 plan continues the agency’s path and direction without the need to sell to a larger firm. CoVerica simply CAN NOT be sold. At the end of the day, we’re providing for over 70 families that we employ directly, tens of thousands of clients, and thousands throughout the independent agency channel. Opportunity and stability is what makes us better.
Running a business isn’t difficult, folks. Based on the horror stories I’ve heard about other agencies, running one ethically might be difficult for some agencies. It really is about treating people the way you would want to be treated which boils down to honesty, openness, integrity, and doing what’s right for you and your family, the client, the insurance companies which we represent, and finally, the agency.
