Beyond Captivity: Frank Fite’s Path to Independence

Personal Lines

Frank Fite II, founder and principal of The Fite Agency in Rockwall, Texas, didn’t start out as an independent agent. He’s been selling insurance for more than 20 years, but he cut his teeth on the non-standard side of the business, selling policies that carriers with household names wouldn’t touch.

All that changed following the September 11 terrorist attacks, which cost the insurance industry an estimated $32 billion. Insurers responded by narrowing their risk appetites, and reinsurers began limiting the coverage they’d previously offered to non-standard agencies, having a direct impact on Fite’s fortunes.

Fite opted to try his hand at the standard side of the business, going to work initially for a large national agency. In 2004, after learning the ropes for a couple of years, he opened four offices of his own in an exclusive partnership with Nationwide. However, the arrangement was short-lived. Nationwide’s appetite wasn’t well-suited to the protection class Fite was trying to write.

In 2008, after building a $1.5 million book over four years, he parted ways with Nationwide and went independent.

Stepping into freedom – and uncertainty

His first step into independent agenthood was nerve-wracking, Fite recalls. After terminating his contract, he had to give his entire book back to Nationwide. “We were in the same office with the same phone number,” he says, “but we were starting out with zero premiums. We still had bills to pay.”

Though his Nationwide agreement prevented him from actively pursuing former clients, Fite knew that many of them would eventually come knocking. Before writing any business for new or familiar faces, however, he first needed to secure contracts with reputable carriers – easier said than done.

“We got a few small contracts in 2009, but had a hard time landing a contract with a major brand,” Fite says. “We didn’t write any business for the first six months.”

Fite signs with Safeco and business takes off

Safeco was the first large carrier to appoint Fite after he severed ties with Nationwide – and it was like rain falling on parched earth. The impact on his book was immediate. In the initial eight months after signing with Safeco, his agency wrote nearly $400,000 in new premium.

This early success stemmed in large part from his existing client base, but Fite also credits the robust training, marketing and incentive programs Safeco offered to help him get on his feet. Six of Fite’s producers have gone through Safeco’s Producer Development Program, which helps new producers hone their sales and prospecting skills.

“From day one, we used every single program Safeco offered to grow our book,” Fite says, and ever since, he’s diligently parlayed new commissions into marketing efforts to feed a virtuous cycle of growth.

“As much as possible, we reinvest our commissions into marketing,” says Fite. “That’s allowed us to double our advertising output every year. We started out sending maybe 10,000 mailers annually. Last year it was 100,000.”

Some advantages of independence

When asked to comment on the differences between the lives of a captive and independent agent, Fite quickly points to the benefit of being able to present customers more options. With Nationwide, he was limited to personal lines products from a single carrier – and a predefined approach to selling them.

“The biggest difference when we went from captive to independent was market availability,” says Fite. “Having access to products from more than one carrier was an incredible advantage. Our close ratios increased immediately.”

While Fite understands that commissions depend on a variety of factors, overall he’s seen much higher commissions than what he received from Nationwide for the same business.

Thanks to higher those commissions and better close ratios, Fite’s book now stands at about $5 million.

What the future holds

Fite’s future looks bright. Fite currently has five agents on staff. He formerly employed a full-time marketer as well, but his wife Sherri now fills those shoes, handling all their mailings, web development and social media campaigns.

His agency’s continuing on a sustainable growth trajectory, which now entails expansion into commercial lines products. To accommodate that growth, they’re building a 5,000-square-foot office in downtown Rockwall, which should allow them to double the size of the agency.

Behind that growth is a real passion for helping customers meet their needs. “I mean, at heart, we’re salespeople,” Fite says. “We want to sell. We want to make money, but the ability to consult clients, to give them options, has been tremendously rewarding.”

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