Ask An Agent: Michael Franke

How did you first get into the insurance industry?

I originally worked for Enterprise and worked with an Allstate agent to cover the Enterprise fleet. After I left Enterprise. we kept in touch and when he moved up to become a district leader, I reconnected with him to start my own Allstate branch.

What did you think about the captive experience?

There were positives - I got to learn the ins and outs of insurance and we got to see the country on company trips but I didn’t like that when you run a captive agency, you own but you also don’t own your business. You’re a 1099, they control how agents get paid with changing quotas / bonus structures that benefit the company, not necessarily your market. On top of that, they try to influence hours you should work, number of employees you should hire, etc. Even though you’re a 1099 agency owner, there were multiple requirements that made it less about how you wanted to run your business versus what the corporate guidelines were for your business.

When did you start thinking about going independent and why?

It was a combination of a couple factors - my lease on the building was ending and my staff were planning on leaving for other opportunities so it was a perfect storm for me to cut ties and start brand new with Franke Insurance Services.

What were some unexpected challenges as you transitioned from insurance agent to business owner?

With Allstate, you have a single system that you run everything through but when you go independent, you have to figure out how you want to handle everything - what AMS do you want to use, what rater do you want to use, etc. It’s a lot of unexpected expenses that go hand in hand with the freedom to build your own system.

What’s one piece of advice you would give yourself if you were just getting started?

In retrospect, I would’ve spent more time learning about how to establish the direct appointments ahead of time to get more appointments and negotiate a better commission structure. In the beginning I had an appointment with Progressive and I worked with a aggregator/MGA to get more appointments but the aggregators take 20% of your commission.

Closing thoughts?

I don’t miss being a captive agent - I really like being my own boss. I do recommend joining groups like IAOA (Insurance Agency Owners Alliance) who have helped build a sense of collaboration across the independent agency community so we don’t have to fly alone.