David Stuart is the founder and president of Southwestern Insurance Group. Although it’s highly successful now, he started with no experience in insurance.
He credits his insurance network for giving his scratch agency the support he needed to grow a thriving agency.
Opportunity Knocks
David’s path to a career in insurance is a little unusual. During college, he completed a door-to-door sales internship, and after graduation, he got a job in medical sales. He proved himself to be a proficient producer, so when the Southwestern family of companies planned to start an insurance division, they wanted David to head it.
At the time, the company had no experience in insurance, and neither did David. “We had a business plan, and I certainly had a track record of success in medical sales–but not insurance,” recalls David.
Nevertheless, the opportunity was too tempting to pass up. David accepted the job and moved to Nashville.
A Lot to Learn
David had much to learn about insurance and licensing requirements. He also started looking into how to get appointments, and the top search results pointed him in the direction of an insurance aggregator or cluster.
There were a lot of options. “I really started doing my homework to see which company might be the best fit for us,” David says. “And naturally, I went with Smart Choice, for a handful of reasons.”
One major factor was the structure of network contracts. “I was concerned about the complexity of a potential contract, the length of a contract, the things that could essentially tie us up in the future,” David explains. “I think a lot of the other companies had thresholds on production. If you missed certain levels of production, your contract would be in jeopardy.”
Smart Choice was different. “Smart Choice’s contract was straight to the point, simple and easy.”
A Better Way to Earn
Another key consideration was commissions. “Smart Choice offers a 70-30 commission split, but it’s capped,” David explains. “Once we hit our threshold, we were able to keep 100% of our commissions–not to mention access to bonuses earlier than we might have as an individual agency.”
Some other networks offered commissions splits that may have seemed better at first glance, but the devil was in the details. There were no commission caps, and several contracts included terms that did not work in David’s favor.
“There are some networks that charge an upfront fee to join,” he recalls. “It was an outrageous amount of money.”
David wasn’t comfortable with the idea of paying a lot of money upfront with no guarantees that things would work out. In addition to offering a simple contract, Smart Choice didn’t charge any fees. It seemed like the obvious choice, but there was one more issue that mattered to David...
The Support a New Agency Needs
Perhaps most importantly, David wanted to join a network that would provide true support as he got his agency up and running.
“I wanted to have a partner, somebody that was invested in our growth and cared about our success,” he explains. “One of the deciding factors was being able to work with Tony Davis, Smart Choice’s state director in Tennessee.
The level of support that he gave us at the beginning–I cannot overstate how critical that was to our success.”
Establishing an insurance agency from scratch wasn’t easy. “It was just me, at the start, in an office the size of a closet,” David says. A few months later, another agent came on board.
“We literally knocked on doors.” David recalls. He also networked with real estate agents and leveraged his connections at the Southwestern conglomerate. “We really tried everything.”
Today, referrals make up around 30% of David’s business. He purchases internet leads through EverQuote and has refined a sales process for them. Retention is just as important as new business, and his retention strategy has evolved as well.
In the first year, David estimates his agency pulled in about $50,000 in revenue on roughly $500,000 in premium. The next year, he was up to $250,000 in revenue, and things kept growing from there. “Last year we did about $3 million in revenue, and this year we’re aiming to do $4.2 million in revenue,” David says. “But I think our book of business is probably in the ballpark of $25 to $30 million, at this point, in yearly premium.”
David’s success has been the result of hard work and reinvestment. Smart Choice has helped, too.
“Almost all of our carrier appointments are through Smart Choice,” David says. “Tony literally coached us on how to present policies and quote policies.”
The incentives and bonuses that Smart Choice offers were instrumental in maintaining a good cash flow in the agency’s early days. “Every penny mattered. It still does, really, but there were a handful of those incentives and bonuses that made a significant difference to our business.”
Advice for New Agents
Now that David’s agency is established, he has one piece of advice for new agency owners. “I would certainly recommend Smart Choice, that’s for sure,” he says.
Do you want a simple contract, incentives, bonuses, and the support of a great team?