Page 116 - The UnCaptive Agent

INSURANCE CARRIERS 89

when they consider whether to appoint you or not in
the first two or three years of your business.
When convincing insurance carriers to appoint you,
one of the things that you have going for you is the law
of primacy. The law of primacy simply means that what
you do first tends to have a disproportionate impact over
time. Generally speaking, agencies place nearly fifty per-
cent of their business with their largest carrier. The other
companies they represent split up the difference. Often,
the largest carrier is the first carrier to give an agency an
appointment. Insurance companies know this, and they
will seek to be the first appointment for agencies they
believe have high potential. Regardless, carriers who are
interested in ever appointing your agency will want to
do it early. They know that over time, they will get more
of your business than those who come later.
Another thing carriers look for is how you plan to
service your accounts once you’ve written them. These
days, many companies who focus in personal insur-
ance or small commercial insurance will give agencies
a chance if the agency agrees to use the carrier’s service
center. Bear that in mind as you build your business plan.
A very important thing for insurance company exec-
utives to understand is how business will flow in your
agency. In other words, how many at-bats will you be
able to give them each year? If they know you will
be quoting them a hundred times in the next twelve
months, they can make reasonably accurate assumptions
about how many of those at-bats they will win and what
the resulting volume will look like. So, even though they
know that you don’t know how much business you’ll
write in the next three or four years, if your marketing
and sales plan show a strong potential flow of quotes,
they’ll have a fairly high degree of confidence that they
can get to the volume they need.