From building carrier relationships, to attracting talent amid a labor crunch and investing in the right technology – brokers face a variety of challenges as they get off the ground.
But for one broker, slow and steady wins the race.
“We invested quite heavily in the foundational aspects of building a brokerage,” Josh Pillsbury (pictured), managing partner at Summit Commercial Solutions.
“We spent about four months just building that foundation before we even hired our first employee – I think a lot of brokerages struggle because they’re focused on selling and building a business but lose track of the back-office work.”
Pillsbury and his co-managing partner, Davis Gilbert, started Summit Commercial Solutions in February 2022. Based in Kelowna, BC, Summit caters to the small- to mid-market commercial market.
One year later, the firm is poised to welcome its 10th full-time team member and is fully in “growth mode.”
Scaling means finding and recruiting good people has become a top priority.
“There’s definitely a talent war out there, and when you’re a small or mid-sized brokerage, you have to compete against the larger shops, so your value proposition has to be strong,” said Pillsbury, who is speaking at the upcoming Specialty Insurance Summit in April.
One of the toughest parts of the early stages of a new brokerage is obtaining contracts with carriers. But in Summit’s case, being a young broker has a been a positive rather than a hindrance in forming those relationships.
“Many insurance companies are focused on building their distribution with partners that are going to be there for the long haul,” Pillsbury said.
“We always say that we're running a marathon, not a sprint, so they could see this is going to be a long-term relationship.”
Staying independent – at least for now – is also in the cards for Summit. Independent brokers can scale quickly in the current market for several good reasons. One advantage they can have over larger incumbents is agility.
“We don’t have legacy systems that would need to be replaced or ripped out for a digital transformation,” said Pillsbury.
“We can build the commercial insurance brokerage of the future from the ground up.
“I think we'd love to stay independent forever, but obviously, we can't predict the future.”
Any entrepreneur that wants to start their own insurance brokerage will likely be a sales-oriented individual, or a broker that was able to build up a substantial book of business at a larger firm.
“There might a natural temptation to just come out of the gate sprinting and build as much volume as possible, but I wouldn’t recommend doing that,” Pillsbury said.
“Instead, I would recommend you spend time building the foundation of your brokerage, getting all your ducks in a row, and having a business plan built out for the next five years, because once you start going, it’s hard to go back and reconfigure.”
Pillsbury’s second recommendation is to invest in technology. Amid fierce competition in the market, small brokers face an uphill battle if they’re not investing in technology to streamline the back-office process and operations.
“If you wait, it's going to be more expensive down the line to make that transition, and it will be much, much more difficult,” he said.
Lastly, Pillsbury advised aspiring entrepreneurs to just enjoy the ride.
“Have fun along the way. You can’t treat it as purely a job. You have to enjoy it, in the end.”
Insurance Business Canada is bringing the biggest names in speciality insurance together at the first-ever Specialty Insurance Summit. The live event is happening on April 27, 2023 at the Arcadian Loft Toronto.
Don’t miss a chance to connect with more than 20 MGAs and to be part of the conversation. Register now.
