Kevin “Scooby” Hutchins, owns three Allstate agencies in Wichita, Kansas. Allstate Insurance was founded in 1931 and it continues to be a proven leader in the competitive field of insurance and financial services. It is consistently ranked among the Fortune 100 companies, and agency owners say that Allstate is unique among all other insurers because you own the economic interest in your business.
Let’s start with how you got into the business.
Hutchins: I worked for several major corporations such as Sears and MCI, and frankly, I got tired of losing my job due to no fault of my own. I could be a top performer and give the company everything I had, but still wasn’t immune to downsizing or businesses closing. I wanted to have more control over my life, and I knew owning my own business, while not easy, would give me that control.
So, that started me on the path. My first stop was Edward Jones to study securities. I didn’t even know what a security was—outside of the one that stood outside of the mall. That didn’t quite work out, and I moved on to health insurance, obtaining my health and life certifications. I started working at Western & Southern Life Insurance but quickly realized that I could be earning a lot more.
What made you land on Allstate Insurance as the right investment for you?
During my research, I determined that Allstate had the earning structure I was looking for. While the investment is significantly higher than some franchise brands ($100K in accessible, liquid capital), I knew that whatever I built belongs to me. As an Allstate agency owner, you own equity in the business you build and earn repeat revenue from policy renewals. That’s not the case for most insurance agencies.
Owning your own book of business opens up a world of possibilities. Allstate has bonus opportunities of 3%-4% of your book size, as well as many other great sales incentives. And of course, if you choose to sell your business, you have a valuable asset that can be sold to a qualified buyer.
But it’s even more than just that. I recently leveraged my book of business to purchase the entire building that we were leasing office space in.
It’s not necessary to invest in a business ownership to get into insurance sales, right?
True. But the behavior of most people isn’t to seek out an insurance broker, and that’s where strong name brand recognition can make all the difference. Almost everyone is familiar with the Allstate tagline “You’re in good hands”; and that’s very valuable in establishing trust.
You opened your first office in 2006 and grew to three offices and a book of business worth close to $8 million. How have you been able to be so successful?
When I first started, I just wanted to make enough money to cover my $70K salary I made at MCI. Once I got into the business and realized I hit that $70K number in the first six months, I had a completely different mindset. After that, sales increased incrementally, and rather than paying myself more in a salary, I reinvested that money back into the business.
I opened my second location two to three years later, and my third location in 2010. But with expansion, I had to make some changes. Rather than working in the business, I had to shift to working on the business. It wasn’t easy because I really enjoyed sales, but in order to grow, you have to shift your mindset. This meant hiring a sales manager, a service manager, and several reps that focus on new sales and those that handle policy services. Insurance has an 85% retention rate, so that’s where you want your focus to be—customer retention. We realized we could do twice the volume if had specialized teams—one doing one thing and the other doing another.
Where do you see your business headed?
While we’ve done well, I have my eye toward being a top performer in this business. We have a model where we’re looking to reach $20 – $30 million in sales. That’s what’s really nice about owning an Allstate agency. I can achieve that goal without having to reinvent the wheel. I’ve been able to speak with and learn from top performers and implement some of their processes as well as some of my own that I learned along the way. Having worked in a corporate environment, I’m able to use what I liked about that world and avoid the things I didn’t like.
What advice do you have for people looking to get into the Insurance field and/or business in general?
Well, specifically for the insurance industry, you have to know that you’re working for the residual income. You have to look at it as selling over a long period of time—that’s your paycheck.
I call the first 90 days the “peanut butter and jelly” stage, as that’s what you need to be prepared to be eating. Because I wanted to really focus on building my niche in the business, I paid all of my bills for the business, in advance, for 90 days. I didn’t want to be selling out of desperation. This lowered my stress and allowed me to be genuine with potential customers.
My other advice would be that when you hit bonuses or exceed revenues in the first three years of your business, use that money to reinvest. Once you get past year three, you should be at a certain revenue level that allows you to ease up a bit and possibly do other things. Insurance is a teeter-totter business; as your sales drop, your residuals kick in.
What makes a good Allstate agency owner?
You must be comfortable speaking with people you don’t know, and you have to genuinely care about people. Having worked in telemarketing, I know that there are good people that take pride in doing their jobs, and those that will do anything for a dollar. In this business, your ability to care about people and their families is what is going to get you in business and keep you in business.
Because insurance is not a tangible product, customers have to believe that you’re selling them what they need. When I first started my business, a majority of it came from consumers that had terrible damage from hail and freeze storms the prior year. When they went to file a claim with their carrier, I ended up getting referrals for customers that had bad experiences with other agents. While Allstate has its motto, I have one as well: I take care of every customer like I would my mother.