Posts

Non-Profit Insurance Agency 2019-05-13T09:47:59.746Z · score: 25 (16 votes)

Comments

Comment by zwcoop on Non-Profit Insurance Agency · 2019-05-14T15:06:35.739Z · score: 1 (1 votes) · EA · GW

I agree with this completely.

The one distinction I would make is that I do not own an insurance 'company'. I run an independent insurance 'agency'. I feel you general point is about trust is valid regardless. The reason I bring it up is not to be argumentative but to highlight the fact that a customer of mine can choose whichever insurance company the want to have their policy with. I'm just the broker. The problem that clients have is knowing which company offers the best deal for their situation. My job is merely to be as objective as I can about their choices.

It's just a different type of trust. If you shop through Amazon, for instance, you are basically trying to figure out which company to trust and which has the best deal. You don't have trust in Amazon to provide the best product - they don't make products (at least for sake of this simplifies example) - you just need to trust that they are showing you all the available options in an objective fashion. This is aided by reviews etc.

So, how I see my role is simply providing a marketplace for people to shop plans. Not to provide the plans per se.

Comment by zwcoop on Non-Profit Insurance Agency · 2019-05-14T00:49:13.813Z · score: 1 (1 votes) · EA · GW

Another question I had is that if by operating as a non-profit I could retain my profits in the early years and reinvest them in growing the company. Essentially building a trust that long term would be obligated to charity? The downside of donating my profits at this point is frankly I don't have very much profit and it would be much more difficult to grow if I was giving away revenue in the early stage.

Comment by zwcoop on Non-Profit Insurance Agency · 2019-05-14T00:42:19.212Z · score: 1 (1 votes) · EA · GW

Thanks for the link! Car salesmen are very similar to insurance salesmen in perceived ethics by the public for sure!

I honestly am not sure if the benefits are worthwhile or not. I find it an appealing idea but, as of now, do not understand the logistics well enough to know. I can't tell from the article whether this salesman worked for a particular company or a used car lot or what? Hat's off for his efforts regardless!

What I envision (realistic or not) is the following comparison. If you had a choice of buying any brand of car you want through A) the company that makes the vehicles (Ford, Chevy, Honda, etc) and or B) through an independent company that could offer all the exact same cars for the exact same costs and that donated all revenue above operational costs to charity ... which would you choose?

One thing that is a little different in my current situation is that I am not longer a salesman in the sense that not only do I need to make sales every month to survive, I also have to grow a company which means paying overhead, reinvesting in marketing and hopefully hiring additional staff over time. The problem with donating a fixed amount of sales in that it is hard enough to grow a business with 100% of the revenue let alone with less. One of my thoughts with a non-profit is that I could retain the profits and use them to grow the company in the early years, building sort of a trust account that would be obligated to charity once the growth phase evened out. I'm not sure if it works like that or not though

Comment by zwcoop on Non-Profit Insurance Agency · 2019-05-13T23:53:16.068Z · score: 1 (1 votes) · EA · GW

Thanks for the reply! I have read the article and it is super inspirational. What would be the additional benefits of a setup like Newman's Own?

Do you mind if I as your opinion of my thought above that there may be a marketing advantage to being labeled a non-profit considering the widespread distrust of the insurance and financial industries from the view of average consumers?

Comment by zwcoop on Non-Profit Insurance Agency · 2019-05-13T23:47:28.093Z · score: 2 (2 votes) · EA · GW

Thank you for your reply! I am, as you guessed, operating as an LLC. I wasn't sure if there would be any advantage in trying to obtain 501(c) status or not. I don't know very much about it. My thought was two-fold. 1) That I would reduce my tax and therefore would be able to donate more ... however from what you're saying I can deduct up to 50% of my revenue if it was donated to to charity? 2) That there is would be advantage to growing a business by marketing as a non-profit. The distinction being able to advertise my agency as primarily interested in growing to give to charity as opposed to the primary purpose of making a profit and we also give to charity may excel grow and overall revenue by appealing to individuals and companies that are inherently distrustful of the motives of insurance producers and financial advisers.