What's the swing between captive and independent? And then also, what is that same swing when it comes to closing ratios?
SPEAKER_01If you're established, we're able to do it as a captive agency, then the only difference is really just the appointment process.
SPEAKER_05If a captive agent was listening to this and they wanted to go independent, what would you advise them?
SPEAKER_01If you don't have any experience with that and you literally have to just start off with like, okay, now I let go of this captive appointment and then I start with one carrier day one, then that would be a much longer learning curve.
SPEAKER_00A 25 policy agent for you now as an independent. Man, probably half of that.
SPEAKER_01How would people respond if I'm calling, you know, because we do upbound costs too, like, hey, we're calling from Key to Gym Insurance? Like, people are gonna be like, no, I signed a lease for $20,000 a month. Did you say $20,000 rent?
SPEAKER_05How big was the total book around?
SPEAKER_01$17 million.
SPEAKER_05Wow. Dan did something that I think a lot of captive agents wish that they would do.
SPEAKER_01Alright, guys, yeah, the craziest thing that ever happened to my insurance agency, um, at the end of 2023, I signed a a lease for $20,000 a month uh office space. And that whole year I've been planning on that expansion, you know, designing the space, getting the cubicles in, just making sure everything was ready. I was thinking huge, you know. And then the week before I was gonna get the new keys, I have a meeting with the reps from the previous captive carrier I was working with, and they told me that we're just gonna non-renew, you know, six million dollars worth of your book. And in a span of six months, because there were six months policies. So right when I moved in that same month, we had 800 non-renewals per month.
SPEAKER_04We are in the insurance.
SPEAKER_01So yeah, my name is Danky Dejimet, and I am an insurance dude. Boom.
SPEAKER_05Boom.
SPEAKER_01That's a there's a lot to unpack there.
SPEAKER_05A lot to unpack. So I guess I'm doing some easy stuff.
SPEAKER_00I'm really excited.
SPEAKER_05Or you go. Yes, I'm really excited about this episode. And I think a lot of our listeners will be too, especially um the captives out there. We have a lot of captive listeners that have gone through some similar experiences, like Dan has, probably not as gnarly, I would say, right? Like that's a gnarly. May maybe some of us in California, maybe some of us in California. But uh Dan did something that I think a lot of captive agents wish that they would do, or have thought about, or have dreamed about, maybe, or just have said in groups, but Dan went for it. And so stick around because this episode is gonna get incredible. And uh, we're so excited to have you on the show, Dan.
SPEAKER_01Yeah, no, thanks for having me back, guys. It's been we we've done this a few times, and I've always loved working with you guys, so it's always great to be back and uh you know hang out with you guys again.
SPEAKER_00Yeah, love it. You go, Craig. I got so excited I didn't even know to go into the intro. I mean, geez. Unless it was cut, then disregard what I just said. Uh hey, Dan, I the first thing, I mean, it's just low-hanging, and and uh just in case anybody didn't hear that, Craig. You just sorry about that. I can't say low-hanging anymore. Um did you say $20,000 rent?
SPEAKER_01Uh yeah, you know, I was thinking huge, you know, and I still have the space here, you know, signed you know seven-year lease, and uh we went from we doubled the size basically of our office.
SPEAKER_00Because you were gonna go big. Yep. So you were you were at the you were at this point where you're gonna go all in. You're like, that's it, I'm ready to blow it up, I'm gonna go nuts, and then you have the meeting that was like the gut punch.
SPEAKER_01Yeah, I mean, things were going pretty good at that time, you know, 2022, 2023, you know, um right off COVID. We we were selling policies and we were breaking records and I was just thinking great, but you just never know what the Department of Insurance has in mind and also what the carrier has in mind, what they're going through. Well, I kind of, you know, looking back at it, I should have saw the signs. But I was just uh optimistic, and um, you know, that's still me. You know, I still think positive. That's kind of what you know, entrepreneurs we kind of do sometimes get a little too optimistic to a point of delusion. And uh, but that's a lesson I learned. But uh yeah, that was a situation I found myself in. How how big was the total book around? Uh 17 million. So it was about a third of it.
SPEAKER_05Wow. Take us through that. Like, I I I want to kind of like like, what are you thinking? What are the different um plans that you have uh at that moment? Like what what's going through your head?
SPEAKER_01Well, yeah, um I worked hard for those clients. I I almost feel like you know, we've we we paid a lot of commission for those clients. So I bought a lot of leads for those clients to obtain those clients. So part of me is thinking, like, hey, I I and I I almost feel like there's an obligation for me to like, hey, like you guys trusted us to get your insurance. I don't want to just drop them, right? And not be there for them. So part of like I felt like an obligation to like be there for my clients. And the thing that worked out, which I appreciate, and I know this is different for all captive carriers, is that mine lets us get appointed with other carriers if it doesn't qualify with the main carrier. So that actually opened up the door for me to be in this position that I am now, because prior to then, you know, and a lot of agencies, this was commercial policies, but we're mostly a personalized uh agency. So at that point, I said, hey, I gotta start finding carriers for this agency. I mean, that's what the carrier actually told me to do. Like, hey, they even gave me some contacts that said, hey, contact this carrier. Most of this was non-standard stuff. So, like, hey, contact this carrier, and then you could get appointed with them, and then you could start rolling these carriers to these carriers. And that's when I really got the first taste of like getting appointments by myself, you know, charging broker fees. It was just everything was brand new to me, but that experience made me a learn that side of the business while I was still had my uh appointment with the main captivate carrier.
SPEAKER_00So, was your intention to go sort of hybrid where you were gonna have those relationships that they recommended or or said that you know you could go have, which seems like a really good idea. I mean, it just seems like a good idea for a carrier that's gonna stop sell letting it a person sell products to then replace it.
SPEAKER_01Seems like a good idea for my and potentially come back to um, you know, when when the timing is right. So it wasn't really my intention. Like I just loved the captive carrier I was with at that time, and it had a good enough closing ratio, had you know, uh prefer standard, uh non-standard products there. So I I felt like everything was fine, like the compensation was great. So it wasn't really my intention to like be where I am at here. I it just kind of like I was forced into it. Like I had to force getting the into these carriers because yeah, my my thought process was always like, okay, what can I do for my customers? And what can I do for my producers too? So it just I never really thought I'd become an independent agency because everything was just so fine. But then once I started learning a little bit more, uh again, I felt it was just kind of like it's funny how life works, you know, you kind of like just things are just happens like um with without just by um not not with intention, but just through like circumstances.
SPEAKER_05Yeah. So what what were you what were you able to save?
SPEAKER_01Like you know, uh most of it we had a pretty good CRM system, you know, that I I designed um, you know, with communication going out uh based on non-renewal dates and these other carriers there, even though California was going through a difficult time at that time, some of these non-standard companies did they actually wanted to write. And that's one thing that I learned too. Like, hey, like every insurance company is different, you know. Um some may be in a situation where they're like just don't want anything and actually want to reduce risk in this state. And some carriers, like you know, new ones are like look at that as an opportunity, be like, hey, this is our time to grow, this is the time we could get aggressive, this is time for us to like have extra incentives. I was like, wow, this is so different. How each carrier is so different within the same market here. So these non-standard carriers, they're they're pointing me, they were like, you know, thankful for the business we're bringing in and you know, giving out other shelw incentives that I've just learned about. And you know, uh, thankfully, due to the appointments really saved us, you know. So out out of all, I I would say not all of them, but 75%. You know, I wish I had the the data on that, but my intuition is probably like 60 percent, 80 percent. We had good relationships with our customers, and we told them, hey, you we're gonna non-renewable, we already have this ready for you. You know, it wasn't that we were able to retain, you know, help them not have to make the decision, right?
SPEAKER_00Yeah. Like, here you go. We are we are there's bad news, but we have great news because we can put you over here. And I think so then you started seeing, oh wait, this is this isn't much different. And I have this stuff over here, but I could just make all of it. Is that what it was? It was just like, well, this seems like a just an easier path to manage if I have it all here, or did you see that you couldn't like doing the shifting the business over to the other uh to the independent side or the channels that you had there, that it it just wasn't gonna make up for the loss unless you were able to commit all the way? What was the like the defining decision?
SPEAKER_01Well, um it wasn't easier because there's a lot of guidelines with each carrier, you know, to learn and different like systems to go to and learning the radar and then you know underwriting guidelines. It's not all in like one place, you know. So it's a lot of learning curve there. I think I think the deciding factor is when because if I'm still with a captive carrier, I still have to go through them first. And if they decline or non-renew, then I can write with the other carriers. Uh-huh. So if I let go of the captive carrier appointment, then I could just write with all the carriers I have due to anything, due to pricing. You know, not due to the eligibility. So it worked well with like, you know, having the captive as a preferred carrier and all the other ones as non-standard. Yeah. But if I wanted to kind of get into the standard and preferred market for the for the independent, then I I couldn't have that captive carrier relationship because I've had to honor that contract, like having to go through them first. And now once that captive carrier started wanting to write more business and are accepting more businesses, then my independent side would I wouldn't be able to offer. But but it was weird because in my back of my mind, I was like, well, this carrier actually has is a better fit for them price-wise. And you know, when it comes to insurance, price matters for our customers. Right. And I felt like, again, thinking about the customer first, I was like, hey, as an agency, we'll actually be doing more of a service or customers. If I could just say, like, hey, this is the best price we could give you. Not because, hey, we had to go through, you have to get this one first, and if you don't get it, then I can't help you. Yeah. So I did a little bit of the math, and I think it's just um closing ratio. You know, that that was that that was a big decision uh factor. And then also, you know, frankly, um, you know, revenue, commission plans and broker fees and things like that. And I I saw it side to side, and even though it really hurt me to um let go of that book of business I've built for 17 years, I said, hey, it's like, it's like I'm not getting younger, you know. So it's like um if I were to do it, it's just just not now's the time because I I felt like I was kind of like half pregnant. You know, I was kind of like, you know, w it all the time I was like thinking like what what am I gonna do, you know? So I just said, hey, you know, I I just have to uh pull the court here. But I felt like I was ready, and I'm really grateful for the experience there that I had with that captive care because you know, I I I I didn't know how to be a business owner when I first started. Like I kind of needed that that brand's backing, I felt like. Like I just like I couldn't really stand on my own when I first started. But 17 years later, you know, you kind of like know the game, like marketing game. And it taught me so much how to hire people, and like, okay, now I could like I feel like a grateful like kid, like, and they're the parent. Like they they they raised me to the point where I could I truly feel like I'm like, okay, I'm really on my own now, but they helped me get to this point. Like I'm like a teenager that's about to move out of my parents' house.
SPEAKER_05I love it. That's such a good analogy. Um, I have a couple questions on what you just said. So I would like to type what what are we talking with the broker fees too? What what what were the the determining factors? Like what's the swing between uh captive and independent? And then also what is that same swing when it comes to closing ratios?
SPEAKER_01Yeah, well, the swing is huge. Where um, I mean, first of all, we don't we don't charge broker fees as captive agents. Okay, so a lot of times when you're I'm not seeing we're not selling policies ourselves, we're having producers sell it for you, then a lot of the um revenue or the profit, I should say, comes from renewals, you know. Uh afterwards, it's just a long-term investment. Like you purchase a lead, you purchase, you know, uh you you pay your producers, you're not really making that much money on off front. Now, if you could charge a $200 broker fee when you first sell a policy, then the cash flow problem really, really, really gets a lot better. You know, when that's and you don't have to wait for the first on that, that's like straight to your bank account. You just boom, it's just like right there, you know, as as you charges. So that was an eye-opener. I said, wow, this revenue stream is something that I never really understood because I've never been exposed. I didn't know how it even worked. And then um, before we get into the closing ratio, Jason, yeah, just comp plan by itself, like the the the percentages, you know, because we're at the captive, you know, uh carrier, there was a lot of um, you know, variable comp. It was it really made a big difference. And then also we had to really focus on other lines of business we weren't that um strong at. You know, and it just was like we were always thinking, like, man, we gotta write like this and that. And it's like I I kind of like to be a one-trick pony, like do something and do repeatedly and just scale that, you know, and then 100%. And it was we had to go out and write some policies that we weren't comfortable with, and it just kind of like slowed down, like you know, we'd because each product requires like its own marketing campaign to me. And then we would just try to cross sell and we would get by and we hit we hit those numbers. Um, but then the renewal comp started really getting confusing and it really would sway. Um, so not so much on the new business side, because the new business side, they you know, they have some nice comp with bonuses and stuff like that. But on the on the renewal service side commission, it's nice to have like a stable, like you know, set, you know, uh comp uh percentage and closing ratio, yeah. I mean, again, you know, people are pretty price sensitive, and it's like it's no secret, like the best marketing works where like, hey, we could save you money, you know. So it's like you're kind of leaning with that that and if you can actually deliver on that, because we you know, when you have 10 plus carriers and you can just say truly this is the best one, you know, um, then then it helps. I mean, yes, it's nice to have the brand, and I think certain buyers prefer that, and that's that's great. But I think where I saw where maybe my clientele, you know, was they kind of prefer the the savings, you know. Yeah it's it's just kind of where they call it the market is like you know, people just want in your opinion, does the branding matter as much as it used to? Um I think it defer depends on your market, you know. Yeah, I think if for the preferred side, yes. You know, people care more about the coverage and they want higher coverage and things like that. Uh and you know, uh a good reputation when it comes to claims because they have more to protect. Now, if you're in the standard or non-standard study, then not so much because it's just like, hey, what can I afford? Like, yeah, it'd be nice to have you know a company I heard of, but this is my budget right now, and if you can find me something lower, then I actually appreciate that. So I think it really depends on which market you're uh servicing.
SPEAKER_00I'm curious on those on the broker fees, do uh do you ever get pushback from that? Or is it just a hard and fast, like I don't know what the rules are or what it is with broker fees. So I'm just curious how that all works. Because that seems I mean, that's crazy, right? Like when you all of a sudden inject $200 per policy, I mean that's a game changer. Because yeah, it really is.
SPEAKER_01And and yeah, I mean, I think each broker does it differently. Our agency just has a $150 minimum. Okay, but if you charge more than that, then the producer, you know, there's compensation. Uh um, so our average is about like $189 or uh so. But uh yeah, there it's just um when the customers, yeah, when they do get have pushbacks, then um, you know, we go down to the minimum, $150. But there isn't that like huge of a swing. And I think some brokers have kind of taken advantage of it and gone too crazy with that. But you know, we don't want to, you know, we we we we don't want to get greedy here or take advantage of people. So it's 150 to 150 to 250. So they their producers have some wiggle room, but it's not that's I give them the freedom there, you know. So it's like, hey, it's a big premium, it's like I don't want to I I'm not gonna make much off the additional broker. If you charge a little extra, it's not like your commission goes crazy, you know. So they'll charge 150. And some agents like just charging 150 all the time, and some agents are a little bit more aggressive with that. If it's a smaller policy, they go bigger, but it's just and depending on how much money they save. So um, and it actually they can waive it and they sacrifice the premium comp to a half too. So I give them some flexibility there, but it's really interesting how it is like the wild, wild west to me. Like it's just like, wow, like you could just it's like whatever, whatever, whatever it feels like doing. So um, but it's good to have some set compensation, set agency standards, and uh that way uh the producers know what they can work with. In fact, if they want to go over 300, then they have to ask me for approval because I'm like, why? You know. Um, so yeah.
SPEAKER_00Uh but yeah, there's really nothing sleeps like that funds leads right there, you know?
SPEAKER_01It does. And in a in a way, because we came from a captive agency, we almost felt bad, and we almost used to say we don't as like a selling point before. And now all of a sudden we are. Like our producers were like, wait, like this isn't what we believe in. And I was like, Yeah, the way I looked at it is like, well, if they could pay us the broker fees, then in turn we're gonna be able to provide better service for them because we're gonna be able to staff our customer service reps, and then we we could pick up the phone calls on our first call. If our revenue wasn't good, then we're gonna be out of business and we're not gonna be able to service them anymore. 100%. You know, so in a I I that was a huge turning point for us for me to be like, how do I get not get rid of, but like how do I, yeah, kind of get rid of the guilt for charging brokers? I was like, hey, this is actually for us to be better as an agency for us to actually be making money so we can help out our customers in the long run.
SPEAKER_05Yeah, and I need to share it with the reps too, right? Yep, yep. What I've learned over the years is uh, you know, the the guilt of uh it's just a weird thing that I think we all have and that you know in our culture about our premium things. Like people think that prices are set and but but they're set by somebody, right? Like somebody's making up all the prices and and then the values of stuff is all perceived values. And when it comes to luxury items or anything that's premium, it's like it has to when you have that kind of revenue, you're able to do things that are premium. And there's a bunch of stuff that comes with that. Yeah, if you're ripping people off, you should feel bad. But like to your point, if you can hire a a staff that's gonna pick up the phone, like that's what they're you gotta do it, right? Like if you want to have that next level company, you have to do that. And I'm sure there's tons of brokers in California that aren't doing that, that have crappy customer service that aren't providing any service for for their clients. And I I think that that's way worse than charging a little bit more and being there for your people, you know.
SPEAKER_01Yeah, same thing with part with your guys' operation too, teledudes. You know, the the more revenue you have, you can use that techno revenue, capital into technology and provide a better service for your clients, you know. So I think I think without uh you're doing a disservice not only to yourself, but to you know your your clients if you're not making money. Right.
SPEAKER_00No one wins on the race to the bottom of prices, right?
SPEAKER_05And if everybody's penny pinching and you're at this like small margin, there's a lot of stress. There's a lot going back to you know, when you were at the end of your road uh with the captive, I'm sure there was a I mean, that's a lot of stress because you're starting to get to those numbers where it's like you know, there's very little margin of error to to mess with, you know, and that's that trickles down from the from the head, the owner, uh The leader all the way down to your team, the way everybody operates. And yeah.
SPEAKER_00Yeah, you see the difference. Like um, because we talked to a lot of agents too, and you see the difference in like where I mean, I was I was in that place of scarcity mentality with the agency where I'm gonna wait until I have just a little bit more money, then I'll do, you know, and there was always wait, but it now it never improved without doing the thing first, right? Like you're not gonna get in a better position. I mean, my experience was I never got in a better position by waiting for it to get in a better position for me to then do you know the market or then do whatever, right? It was you had to kind of you had to make that yet, you just had to go for it. Yeah. I mean, that's the one that went, right?
SPEAKER_01I mean, yeah, I remember that. I always thought that, like, hey, next year the renewals will kick in. Next year the renewals will kick in. It's like it's never as good as you forecast it. Yeah, right.
SPEAKER_02Yeah.
SPEAKER_05Uh so how long did it take you to get used to going from the captive model into the independent model? Like like mentally and like just feeling comfortable with your team and everything.
SPEAKER_01Wow, that's um well, the whole process took me about two years where I had access to independent carriers. But yeah, still to the very last moment. So I've only been fully independent for 28 days here. Um, but we're we're about to have our best month ever here. So I think as far as new business, you know, uh policy sold. So once I made the decision, until then it was like I wasn't fully comfortable to like the very last moment, till I was like, hey, I'm gonna do this. But once I didn't have that captive carrier anymore, like I couldn't log in. I was like, I got comfortable pretty quick because uh the that was that that was, you know, and and and thank thankful for my team's adaptability, you know, their buy-in, they're they were you know a big part of decision making. They felt like we could do this, they thought it would be better. Um they thought it we would sell more. So I kind of went off their, you know, and and looking at the data too, but I I wasn't fully comfortable till like I actually did it, but pretty s pretty soon I just felt like, well, um, you know, I got comfortable pretty quick because hey, we didn't have that carry anymore, but we're we're fine. And that I owe a lot of that to my team for their attitude, their adaptability, and uh their feedback.
SPEAKER_05If a captive agent was listening to this and they wanted to go independent, what would you advise them on ramp up time and how long it would take for them to be comfortable with the independent side?
SPEAKER_01Yeah, that's a great question. Now it kind of depends what which captive carrier with, because with my situation, I was a little fortunate because I had access to some of these independent carriers already. So that is a game I already learned how how to get appointments. How what do they want to see? Like what what type of production they're expecting, or like what type of um um rating system do you need to have, or what kind of payment processing system do you need to have? What kind of like forms do you need to have signed? So I had way more of a ramp up time. So if you don't have any experience with that, and you literally have to just start off with like, okay, now I let go of this captive appointment, and then I start with one carrier day one, then that would be a much longer learning curve, I would say. You know. Um, so if that was the situation, you know, but you still hopefully have some revenue coming in from the cell of your captive agency. But, you know, depending on the market too, you know, at if it's easy to get appointments, and nowadays it is a lot more than a couple years ago. So depending on how the market is, what the market is doing, if the other carriers want to write or not. Uh but in general terms, yeah, I would say um, but it's also like it's not it's not that different either. You know, so if you're established and if you we're able to do it as a captive agency, then the only difference is really just the appointment process. And if you're and there's other clusters and aggregators you could work with as well, too, in the beginning, too. So a lot of different ways to do it. If you go direct, then I think long-term it's better. But it might be if it's harder for you to get appointments directly, then uh getting access to cares right away might be better, but maybe the commission split might not be that that great. So it kind of depends on you know, short term or long term, how you want to set things up. But um it's not as crazy or or totally different because at the end of the day, once you have somebody on the phone, you know, it it's same pro the same product, you know, same screw, you can use the same script. It's um so if you really establish as a captive, I I I think I would lean towards being more confident than thinking like, oh my god, it's a totally different game. There there are a lot of benefits for the captives that I could say, and the one thing I'm I'm gonna miss the most is the people. You know, going to the trips, looking at the leaderboard, and then having that camaraderie of like, hey, like how what are you doing in this state? Uh uh, I'm in a different state. Like, let's let's like, you know, um, let's talk about what's working for you and going on trips and then meeting people, same people, and just building those relationships. I do feel like maybe on the independent side there's a little bit of sense of like, hey, like you're kind of on your own. There's no like you know, other agents that you like train with. So, but um I think if you already have a base of like knowing what to do, what works in this business, then and you know, who knows? Uh hopefully I'll be able to, you know, and I'm starting to, you know, network and get to know independent agents. And I think uh thanks to social media and things uh that gets us, you know, connect with more people. I think um that downside of being an independent where you don't know anybody and you're all kind of on your own, I think isn't that much of a factor as I thought it may be. Interesting.
SPEAKER_00Some good organizations, I A A O A. I A O A.
SPEAKER_01I A O A. Yeah. I S A O A like You have to IO E A T A T I M A O U 812.
SPEAKER_02Too Many Accord Forms We Filled That's HC 75309.
SPEAKER_00Yeah.
SPEAKER_05So Um Oh Man. What is your Just Curious, what is your break-even with your marketing that you're spending now uh per agent, where is your break-even point with policies uh with your acquisition costs? Are you breaking even on the initial policy?
SPEAKER_01Uh depends on how many policies that agent sells, you know, because they get the base pay, right? So if they're selling like 25 policies per month, then they're profitable from you from the first from the first policy. From from month one? From month one. Yeah. Whenever you have a producer that's getting the same base pay, but they're not selling that much, that's when it really kills the profitability of the agency.
SPEAKER_05Yeah. Are you uh do you have all you have all of your agents in-house, right? Yeah uh yeah. What is the ramp up time to get to 25 policies?
SPEAKER_01Um right now, like we we've been very fortunate being able to hire people with experience with license and stuff like that. So if they already have a license they've sold before elsewhere, then they should be doing that in their their second full month.
SPEAKER_05So you're only losing out on a little bit.
SPEAKER_00Yeah. So a 25 policy agent for you now in your current low, you know, what as an independent, how many policies would they have been writing when you were uh captive?
SPEAKER_01Um, man, probably half of that. Half? Yeah.
SPEAKER_00And you didn't get broker fees.
SPEAKER_01And you didn't get broker fees, and we would probably be kind of like leaning towards like, hey, do you know any friends or family that need life insurance? So we don't have to do that anymore.
SPEAKER_02We're gonna hire people, we're gonna hire people just to get like their referrals for life insurance.
SPEAKER_05So crazy.
SPEAKER_02It's almost like a MLM.
SPEAKER_00And the last version of your interview, how much life insurance do you have?
SPEAKER_05It's that piece of it to me for for captives is so bananas crazy because you're you're asking someone that specializes in one thing to do something totally in left field, you know? Like, why why not just let the people be good at one thing and then hire for that other and then place them together and expect you know have a certain expectation for each side?
SPEAKER_01Yeah, I think I have a theory of that. I think when the captive agency's model first started, it was kind of like, hey, you become an insurance agent and you sell your neighbors and people you know, like people you go to, you know, you went to school with or people you go to church with, and you sell them the whole, you know, the whole the whole product line. Now I feel like, okay, if you want me to sell like a life insurance policy, then I'm competing with somebody that only sells life insurance for 20 years that has 20 different carriers, you know. Yeah. So it's like it's so much tough with the information age that people could specialize that like I just felt like I was out of my league when it came to like selling real life insurance policies because that wasn't my background, and there's my competitors are so yeah, you're absolutely right, Jason. I feel like as an operation, it's just so much easier to just scale when you just you're really hyper focused on one product, one target market. And so much easier.
SPEAKER_00Yeah.
SPEAKER_05Yeah, do one thing really well, right? I mean, yeah. And the life cycle time of the sale, you're talking, you know, follow-ups, everything for an auto policy, a full cycle of follow-ups is no longer about a month, right? Like max. But like for life insurance, dude, it could be three months to get them, six months to get them to buy, and then you're looking at three months to to have the darn policy issued. It's it's like mentally, how can a sales agent that's that's doing all these quicker sales still have attachment to those you you know, like those policies that are that far out? It's like it doesn't make sense. It doesn't, it's it's a bad flow to have both together.
SPEAKER_01It's very difficult to be good at both at both. I mean, to me, what was tricky was it's such a harder sell, but the comp wasn't like long term, the comp wasn't that great. Right. You know, you only get it for the first year, and then it's like, okay, now I have to motivate my staff to sell the life, so I have to over kind of pay for that because how much impacts the renewal commission. So it was like it was almost like um like a problem I try to solve with money, and just had to like overspend to get that one policy. Yeah. And um it it it really kind of like it slowed us down, you know. Um, but I mean there's a there's a captive agent that does does a great job of that, but that's really a highly skilled individual. And those producers are very hard to find. It's a lot easier when you find a producer, it's like, hey, just this we have just one product, we have one script, and just do this over and over.
SPEAKER_00With the right system, you can almost put anybody in as a as a PC sales agent, right? Like if you if you give them the leads, if you if you provide the environment, most people, if they're if they care and they want to do well, they're gonna be able to do it. Life is so it's so skilled.
SPEAKER_01Now you've got to get another license too. So it's like, hey, welcome to our agency. I know you could kill it here, but now I need you to get this license, and then I want you to like start selling to your friends and family this product. And it's like they're learning that, and then then they have to learn the new system to sell what their their bread and butter is. And then now you're becoming more dependent on your top producers who could do both.
SPEAKER_05I just think like life insurance is a financial product that you need somebody that has a strong uh money mindset, right? Like, like I feel like I could sell life insurance to anybody now because I believe in it, I have it, I can see how to like make a ton of money for myself investing in it and how to, you know what I mean? So, like, so like for me, I could do that. But like you're talking about somebody who doesn't have life insurance, doesn't have a financial background, probably has some money mindset issues, you know what I mean? So it's like to get them to advise somebody else on their finances, it's like who's gonna listen to them? And you know what? That's probably what they're thinking, too. And they're right. Like when you have a life insurance guy that's probably has a bunch of other products too, uh investment in the the stock market and all that other stuff. You have somebody that's like more like a financial advisor that is a master at their craft, they're investing in this stuff, they're they're doing what they're selling. That guy's gonna crush your your sales agents every time because I mean, it's like you can't trust a plumber that doesn't have any pipes in his house. You can't trust an electrician that's you know what I mean. They're not doing the thing that they're selling.
SPEAKER_01Yeah, it's almost like two different sports, too. Right. You know, so it's like it's hard to be world-class at both. And you're gonna if you're competing against another person that's you know only does that sport and are pro at that sport, then yeah, pretty pretty good chance we're gonna get dominated.
SPEAKER_05But I like it when the two people, you know, get get the two masters at their craft together, working together, and then the client has the um you know, masters at two crafts. Like that that that's what I would want as a client.
SPEAKER_01Yeah, you know. Yeah, and that that's what the great captive agencies that are able to produce you know different lines of products. They probably have special, they do have specialists out of each line. So I have so much respect for agency owners who could do that. I I I I struggled with that.
SPEAKER_00I've talked to I've met life insurance at you know at different things or whatever, different conferences and and such. And you meet life insurance guys, they're like, oh, you're a PHC. Tell me about that. I really want to open, I really want to get into that. And it's like, uh if you're good at what you do, I would just stick with what you with that, you know, because that's so much more lucrative. Once it's set up and there's processes, I mean, man, they could crush it, right? Versus like you don't don't try to open this thing up over here.
unknownYeah.
SPEAKER_00Well you partner with somebody, right? Like that, I think that's the best synergy is just partner where you have both things, right? Offer the solution.
SPEAKER_01Yeah, because we all know running a PNC agent is yeah, different animal.
SPEAKER_05Yeah, yeah. Can I ask you some um some numbers as far as as uh your marketing goes? Yeah, sure. As far as so you're because I know you're you know you're back to um a smaller age agency. I I know it's big, but it's big, but it's smaller than what you had. But um, so you're you're probably watching the numbers pretty well. Um what is your like like what is your thought process when it comes to how much you're spending on marketing per agent? Uh and then like the break-even point, and then like how are you how are you approaching that whole uh area now?
SPEAKER_01Uh yeah, right now it's kind of fun because we're more focused on sales now, you know, because uh once you have a it was it's it was fun in the beginning parts of growing a uh captive agency too. And it's the customer service and uh retaining a bit you know bigger book of business is um really where the money's at. But yeah, it's right now we're very sales focused. Uh the lead cost is very affordable right now. I I would say that um I'm only spending about $1,300 per agent right now, which is like the lowest it's ever been. Uh uh my lease sources are Google and Facebook, so I've I've I've dug really deep into that, more indirect. The challenge for me right now is more so availability of agents. So the fear I have is like, okay, when customers call us or they fill out a form, we're not getting back to them right away. You know, then it's like um I'm overspending on leads. I want to spend more on leads right now, I want or marketing, I should say, but the challenge is I just don't have the availability, especially on like um later shifts with this business. I we get a lot more call-ins and people requesting for quotes and people wanting to set appointments like after 5 p.m. and Saturdays and things like that. Uh so availability is something I'm really looking into. So when I recruit for people, I'm thinking, or at least maybe quote intakers. Uh that's kind of like where I'm at right now is like, how do I find agents that are willing to work weekends, willing to work you know, later shifts? And if I could do that, then I'm I I want to spend more on leads. Like I it's it's actually there's I don't know if there's just more shoppers, you know, because um the disruption in the market, the rate increases, the minimum, you know, liability limits going up and stuff like that. There's just a lot of shopping going around right now. So my my background or like what I really like to do is marketing. So I think if that problem is kind of solved, then the biggest constraint is actually producers and availability to handle the lead uh volume.
SPEAKER_05Yeah, it's it's funny when there is disruption and when there are rate increases, most agents that when I'm looking at the chatter um are complaining. But I'm thinking to myself, I mean, I know just from our agency is it like it's almost like the sand at the bottom of the beach. You know how when you walk out to the water, it kicks it up and it like causes the smoke of sand in the water and you know it gets cloudy. It's because everything, everything's finally moving, you know, like all the people are looking for new stuff. So if you are a sales-centric business, you have a million swings at the bat, right? Whereas in a market that stays pretty that doesn't have disruption, it's like sand that's already on the ground. It's hard to get those pieces because they're solidified. Nobody wants to deal with insurance unless they have to, unless there's some sort of pain. So the pain of the market changing is a benefit for those who want to have a sales first organization.
SPEAKER_01Yeah, absolutely. I think same thing with staffing too. Like, you know, if it's the markets like stable and everything's fine and you know, retention is good and the agency owners, then a lot of times, you know, producers are they're pretty happy where they're at. You know, but when these carriers are going through comp changes and all this stuff, that's when like actual like A players actually may look for jobs, which sometimes they don't, you know, only once every 10 years. So when there's disruptions, I think it is uh uh an opportunity for those that are active and um not scared to take action and to um build a foundation when when things get better to be in a much better situation than when people are like, okay, now the market's better, now let's start. No, like now you know you're already 10 steps behind.
SPEAKER_00100%. It's like waiting for it to get better before you pull the trigger. Yeah, you just get away, and then next month it'll it's time to do it.
SPEAKER_01Yeah. Yeah, getting getting started. Um, well, never stopping is kind of like I guess the way to go. But um, yeah, I think uh um yeah, it's an exciting time right now, especially with new technology and stuff like that. But it's um yeah, it is exciting, it's exciting time, and that's awesome, uh Jason, that you really want to get into the numbers stuff, you know. That's that's something that I think agency owners really need to look at. Well, at what point do you break even? You know, um it's it's it was a couple tough years for us in California here.
SPEAKER_03Yeah.
SPEAKER_01So um I'm finally happy to be kind of turned that corner. And that's one of the things that I would say too, you know, and I I just don't want to steer anybody the wrong, you know, so so much because there's so many pros and cons for both sides. But I will say with the independent side that, hey, if this carrier says we don't want to write full coverage cars in LA, all right, fine. You know, we got another carrier that will want to. Right. Another carrier says, like, hey, these cars, we don't want to take that risk in this area or this, these type of cars, or these limits, it's like, no problem, you know. It's it's yeah, I felt very helpless to the carrier's financial situation and their appetite. And that's where I feel a little bit more actually secure going into the future because I'm like, okay, with this one carrier, and we already had this experience with with where with one carrier would just completely just drop out. You know, yeah. I I had it happen again where it's just like no more new business. It's like, all right, gotcha. Uh no worries, you know. Um, we just keep it moving with the the other carriage that show up on the radar. So I feel even though it seems risky, it it's funny how I feel I mean I I I have less risk now.
SPEAKER_05I agree. I mean, this whole thing that happened in California made me really uh understand what the relationship is with the agent. So, like the with the captive agency, your relationship as an agency is to the carrier, it's not to your clients. Your clients, if your carrier decides to screw them, they're screwed. Like you you can't help them. You're not actually uh in a position where you're working on your client's behalf. Where if you have an independent agency who cares about the carriers? You there's so many. Like you can you can sign with the new. Carrier tomorrow. There can be a new carrier that comes out that's better for your clients that you can sign and then switch them over without any kind of like, hey, you're fired or we're stealing your book or anything like that. Right. So, like, so then you become um the fiduciary of your actual clients, right? Like you, you become uh your allegiance is to your clients, not to the carrier, which is a relationship when you're in a situation like we were in that makes you feel better because you can do the right thing for your clients. There was nothing that made me feel worse. And like honestly, I I obviously have some strong feelings about it, but for a carrier to tell me that all of your clients are screwed, and by the way, you have to talk to them and then tell them that they're screwed and then not be able to help them is a crappy position to put an agent in. It's a crappy position to put your clients in. And I like, yeah, so you're spot on when it comes to that. Talk about uh more peace of mind, a better relationship for you as an agency owner. I would say that, you know, yeah. Seems a like a way healthier way to go.
SPEAKER_02I mean, I feel like we're on the edge here with Jason making a decision here.
SPEAKER_05No, no. I mean, also I I'm, you know, I I am in the situation that I'm in, and I'm and I feel blessed, like you said, that you feel blessed for being with the carrier. I feel blessed for having the experience and everything that we've gone through. Um so I guess my mind is like on both sides, right? Like I feel very grateful, thankful for everything that if I started over again, it would be a different I would probably choose a different story. But then again, I don't know because it, you know, it went so well uh at the beginning. So and I learned a lot. So I I mean, I don't think that there's a right in wrong necessarily.
SPEAKER_01There really isn't. And it's just really just based on each agent's, you know, preference, you know. I think um uh I think the the biggest fear I had was like, well, if no one knows Kitajima, like no one knows, you know, but the captive agents, the name branding helps everybody. So it's like how would people respond if I'm calling, you know, because we do out-bound calls too, like, hey, we're calling from Kitajima Insurance, like people are gonna be like, no, you know, or but it's it it hasn't seemed to make that big of an impact as I I thought it would. Um so far, um so good, but I'm just getting started and I still have a lot to learn. Um another thing I would add to you, uh, just another thing that I I thought was really interesting is that the the marketing rests from these carriers, they know you have choices. You know, so the way they kind of communicate and and and the captive side, you know, the the executives there I had great relationships with, I have so much respect for them. But in general, it just seems like they they are kind of like they want you to write their business, and they'll I feel a little bit more of a sense of gratitude when I do. You know, rather than like, oh, fear of something might happen if I don't do this or that. So they they almost know like they're in competition with you know other carriers that are independent. And I'll throw a wild one out there too. This is a wild thought I had. And I think so, in a way, some captive carriers do this is like if they let agents go independent, I feel like they'll get more what they want.
SPEAKER_05A hundred in ten percent. I've thought about that a lot.
SPEAKER_01Right? Because sometimes if you're a captive carrier, you're kind of putting things in if it's isn't right the right fit because that's just you know, and even if it's like a crazy price, people be like, okay, fine, I'll do it. You know, and it's actually risk that they actually don't want. And if they let independent agents write, and I think in some states they already are doing that. You know, it's crazy how like you're you're a captive agent and you can you can't sell with other carriers, but an independent can sell your carriers and other carriers and get paid more.
unknownYeah.
SPEAKER_01But that model, then it's kind of like, well, you're gonna get an agent, independent agent that's has a high closure ratio because again, have more higher revenue so they could pay pay more for leads and hire more staff and actually market more, and they'll the in the captive carrier will now only get business that they really want from these agents.
SPEAKER_05There you go.
SPEAKER_01So, I mean, obviously we're not gonna be convincing anybody to make these type of decisions, but I'm just I was thinking like, what if the captive agents just let independent agents write them, then they'll actually have more agents representing them too. They wouldn't have this like recruiting problem. I'm not sure if they'd even have or not, if they want to have more agents or not, but I don't know. I j I just feel the I just um I don't know, I just maybe believe in just free market and just you know, free economy and uh and um and then just being able to, as you were kind of mentioned, Jason, like a natural intuition of a business owner is like what can I do for my clients? Yeah. I feel like that that's uh um very important for us to know that like, hey, what we're doing is um you know for our customers.
SPEAKER_05I think it's goodwill that you're I mean, like it's the goodwill, right? Like then the client can stay with the agency that they want to stay with, and then when they are in a better situation, they can be with a better carrier, or if they're in a tight situation, they can still set stay with the agency and get that care. You know, and it's like you know, with the CAC going up, especially in in uh California, it's like it's hard to keep spending money to acquire a customer when it it costs more and more, and we can't place more and more. That's the reason why the cost is going up is because we can't like the appetite has gotten so narrow that it's like there's so many we could help so many people, but we can't because we can't. Like there's nowhere to put them.
SPEAKER_01Yeah, it's crazy. That's where the closing ratio makes a huge difference. Yeah. You know, in the numbers.
SPEAKER_05Appetite and closing.
SPEAKER_01Yeah.
SPEAKER_05Well, Dan, I I uh I don't want to keep you forever, but uh this is an awesome conversation. I would love to check in with you throughout the year and just I know this is the very beginning of this, and I think it's a cool gosh, I I wouldn't say a cool story because you've gone through a lot, but like, I mean, it's a it's a it's a heck of a story. And to watch you say, you know what, I'm gonna go for this uh 100%, be able to take your team and everything and everything that you're doing is so cool in that sense, where it's uh it's it's awesome to watch. I I saw I've been watching you on Facebook and I was like, oh man, we got to get him on the podcast because I'm so curious of you know, he you just you're you're going for it, you know. You're you you have that drive, that entrepreneurial drive, and uh you're willing to take chances and you're going for it, and I know you're gonna have success. So it's it's it's awesome, man.
SPEAKER_01Thank you, Jason. That's right. And I I think um that spirit I see it in you guys too, you know. I think a lot of times I see that with captive agents because you know, if you're limited to certain things, then you kind of think of outside things you could do and you know, tell the dudes, stuff like that, where you have full control of what what you can do. I've seen so many uh agents do well with like different businesses, uh, and that's something that you guys are doing, and that's awesome that you guys provide that service for other agents and um you know help out other agents because that that way, you know, um you kind of have a little more creative freedom, you know. So that's I've that's something I've always kind of wanted to do, and that's kind of why I started making content too. Like, hey, I want to offer some type of service to my agents, but again, I I've I've been learning more about myself uh that I'm just like to do one thing. So much props to you guys for having that service out for the agents. Man, thanks, man. So good to have you.
SPEAKER_05Yeah, this is awesome, man. Um super stoked to be able to talk to you about this.
SPEAKER_01Yeah, we'll definitely keep in touch. And then yeah, you guys have to be on my show too one day. 100%, yeah.
SPEAKER_05Yes, and so but before we take off, um, let everybody know uh your podcast and everything that you're doing if they want to get a hold of you.
SPEAKER_01Oh, yeah, sure. It's Dan Kitajima. So that's on uh YouTube, Facebook, Instagram. Those are the three main platforms. Uh so yeah, if you um yeah, want to reach out, reach out to me, especially if you're an independent agent. No, I'm just kidding, just it just any anybody uh that wants to connect. I love just keeping touch and sharing stories of uh how we could win together in the insurance business.
SPEAKER_05Awesome. Thanks so much, Dan. Thanks.
SPEAKER_01There guys, great seeing you guys.