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In today's episode of Agency Intelligence podcast, host Jason Cass continues the Summer of Sales Series with David Carothers, founder of Florida Risk Partners, about his career and founding his agency from scratch.

Episode Highlights: 

  • David is part of the Mastermind, and Jason connected with him on a phone call.
  • David believes you make your own luck, and that’s the key to success in the insurance industry or anywhere.
  • When people ask you how you got to where you are, there’s an assumption inherent in the question that you’re successful where you are.
  • His family moved around a lot when he was growing up, so he had to learn how to integrate with new people, which has conditioned him to meet new people and create new friendships every day for his job in insurance sales.
  • After high school, he took a job as an overnight stock boy at a grocery store, became a manager, and later worked for Super Target opening new stores around the country.
    • By age 30, he was working as much as 100 hours a week, often overnight, to the point that his 2-year-old son barely knew who he was, so he knew he needed a change, which led him to insurance.
  • He flew to Tampa on a whim to have a lunch meeting with a man who worked with his father but also ran a private insurance agency, and he learned a few things in that meeting that convinced him to switch to insurance.
    • The insurance industry is full of average players, and if you’re on your A-game, you’ll rise to the top.
    • The person he met with was starting a new agency that was rife with opportunity for someone good at closing sales.
  • David began to realize that the money he was making would not pay off in the long-term because even though he was getting large paychecks, he didn’t have the promise of a high net worth.
  • There’s a difference between being income statement rich and being balance sheet rich, and even though there’s nothing wrong with being income rich, David says he’s not wired that way and wanted more.
    • David understood that he could make the same income by starting his own firm but in doing so he would also be building an asset for the future.
  • Jason references Malcolm Gladwell’s The Outliers, which identifies people with September birthdays, moving around a lot as a child, and playing sports as markers of potential success that David possesses.
  • When David founded his agency in 2016, he kept operations lean and did not invest in things like fancy office space.
  • David’s agency focuses on a quarter to a half-million dollars in premiums for workers comp.
    • The state of Florida sets the insurance rates, and most agencies don’t use that to their advantage the way David does.
    • David’s agency uses the public domain information on the Department of Financial Services website for prospecting purposes.
  • By encouraging employers to offer light duty to their injured employees, it’s a win all around because both the insurance agency and company save money on worker’s comp, and the employee returns to work more quickly.
  • David’s agency does not sell on price, no matter what.
  • Jason asks what David’s plan of attack is when a potential account does not have underlying issues to solve and is otherwise straightforward.
    • David says that if you are a good salesperson, you will be able to create doubt in the client’s mind. 
    • David sets himself apart by making potential clients doubt their current agent’s abilities and says he will make them better instead of just telling them they’re already doing a great job.
    • He offers to look at client’s existing policies and promises to improve on it.
  • Jason asks about his approach to insurance carriers and convincing them to take on risk.
    • David says he’s developed great relationships with several partners because he has always delivered on what he said he would do.
    • His agency focuses on behaviors rather than the usual tangible insurance metrics like loss runs.
    • Talking about an organization’s behavior is what gets underwriters’ attention and builds trust.
  • David makes sure the companies that his agency works with are doing basic things like measuring safety and fixing behaviors to decrease their worker’s comp risk.
  • David goes into organizations and establishes incentive programs that positively reinforce behavior rather than penalizing unwanted behavior and finds this improves worker safety and insurance outcomes.
    • He uses the same approach to discipline with his children.
    • Companies that push back on this approach are not doing their jobs as leaders.
  • Jason says he has repeatedly heard on his podcast this summer that people who failed or left the insurance industry did so because they didn’t get enough attention from the people they were modeling themselves on.
  • David will be talking about recruiting and training successful salespeople from outside the industry when he speaks at IAOA in January.
  • At the end of 2017, his scratch agency was still just him and he was at $500,000 in agency revenue.
    • They opened their first physical office in January 2018 and their second in November 2018, and will end 2019 with roughly $3 million in revenue.
  • The one common denominator Jason sees between all the most successful people he speaks to is that they are all avid readers.
  • Don’t limit yourself by what the industry has always done, and don’t prevent your own growth by rejecting your own ideas based on what has always been done.
  • Jason thinks it’s a misconception that agency owners’ take-home pay is more than they were making as salespeople because now that he has to invest in his own business, even though he technically earns more money, he takes home less of it.
  • Agency owners should be more transparent with their producers about operations costs so they understand why their commission is what it is.

3 Key Points:

  1. It is important to understand the distinction between income statement wealth and balance sheet wealth.
  2. David sets his agency apart from others in the industry by focusing on behaviors instead of just numbers.
  3. David doesn’t let himself be limited by what has always been done.

Key Quotes:

  • “I have four kids, and when my oldest son asked me, ‘Dad, what do you do for a living?’ I said, ‘I have the coolest job ever, man. I get paid to make friends.’ And that’s really the way that I view where I’m at today.” –David Carothers
  • “We talk about being tested by fire and forging us into stronger instruments.” –David Carothers
  • “I was making a quarter-million dollars plus a year in production commissions, but that’s income statement wealth. I understand the difference between being income statement rich and being balance sheet rich. Anybody can be income rich.” –David Carothers
  • “While your agent was telling you how great you are right now, did he ever take the time to tell you how good you could be?” –David Carothers
  • “If you want to get an underwriter’s attention, don’t talk about loss runs, don’t talk about Zywave, don’t talk about ModMaster. What we talk about to get their attention is behavior. What behaviors have caused the problems that exist in this organization? –David Carothers
  • “If you reward the behaviors you want to see replicated, you will see them replicated. And if you punish for the behaviors you don’t want to see, you’re gonna see them replicated because psychologically people will do whatever they have to do to get attention.” –David Carothers
  • “Do not limit your potential by limiting your ability to envision.” –David Carothers

Resources Mentioned:

 

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