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The Independent Agent as Entrepreneur

Posted By Barry Seigerman, Tuesday, May 1, 2018

How successful your agency becomes is only half about your ability to sell insurance.

from PropertyCasualty360.com, April 18, 2018

Running a successful business requires certain business skills; running a successful insurance agency requires certain insurance skills. The trick is to combine both skill sets so that your business, which happens to be in insurance, will succeed.

If both the business and insurance skills aren’t mastered, the agency can never reach its growth and profit potential — and that can lead to failure.

Entrepreneurial and business skills such as finance, management, marketing, sales and administration, have nothing to do with insurance expertise but everything to do with making the business successful. One must learn to think like an entrepreneur, a businessperson, not only like an insurance agent or broker.

Firsthand expertise

We always referred to our business as “a sales organization that happens to be in the insurance business.” My attitude was that “business is a game” to be played to win. That doesn’t mean it’s all for fun, because it can often be a difficult game to play.

As the business grows, different people can provide the various skills needed. Insurance sales and product knowledge can be easily learned and acquired. The industry offers a wide range of education and development.

But how does one learn to think like an entrepreneur? What is an entrepreneur, anyway? It is not a job or an occupation.

The traits that contribute to success

Most agree that an entrepreneur is someone who is willing to take a financial risk while creating a real business to make money.

From my own experience and observations, successful entrepreneurs possess similar traits in varying amounts: the ability to take risks, strong leadership, foresight (vision), drive, embracing change, being a team-builder, being opportunistic, having a strong ego, being a decision maker, and a desire to play “the game of business.”

Successful entrepreneurs will continuously seek learning and self-improvement. While I was a mediocre student in school, looking back I can easily see where some of my entrepreneurial skills were developed early on, especially risk taking, leadership and playing the game: as quarterback of my high school football team, earning a BBA college degree coupled with four years’ Army ROTC, serving overseas as an infantry lieutenant and platoon leader, and during my undergrad years working summers as a waiter in the illustrious Borscht Belt in NY’s Catskill Mountains.

Between high school and college I worked for an advertising agency on Madison Avenue in NYC — think “Mad Men.” After the military I worked for Aetna Life as a career agent in Brooklyn, N.Y., then in an independent agency in New York City, and at the age of 34, with a wife, three children and a mortgage, flat-out quit my job and started my own agency (drive, ego, opportunist, risk taker, will to win).

The road ahead

Experiences help to shape the future entrepreneur, but once you begin, how do you continue to learn and develop while trying to sell insurance and run your agency at the same time?

For me, I participated in every insurance company producer council I was invited to, and attained president of producer councils with Aetna Life & Casualty, The Hanover and Northbrook P&C. My exposure to “big corporate” boardrooms was invaluable. I subscribed to the Harvard Business Review, served on not-for-profit boards, and for 19 years, while still CEO of my agency, served on the board of directors of a $2.5 billion bank listed on NASDAQ.

All these exposures and experiences helped me to leverage the agency into generating revenue opportunities by both vertical and horizontal growth and integration. In addition to P&C, and Life, A&H, we became general agents for several life insurance companies. With my NASD license, early on we obtained selling agreements with broker-dealers and were able to offer mutual funds and investment products to our customers.

The most significant vertical integration opportunities we developed were: starting a new in-house HR company to provide HR services to our own customers, and forming a leasing company by establishing a partnership. We leased computers, office equipment, and automobiles, among other things. Can you guess who was the major customer of the leasing company? Our own agency! (Talk to your lawyer and accountant before you do anything.)

Tags:  business management  entrepreneur  independent agent  management 

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