Starting your own brokerage from scratch

Starting your own brokerage from scratch

Starting your own brokerage from scratch
Withey Insurance Brokers Ltd. has certainly followed the road less travelled in establishing a new brokerage from scratch in Huntsville, Ontario. 
 
Traditionally, new brokerage ownership happens when a brokerage is handed down to another member of the family, or with one brokerage acquiring another. 
 
Not so for majority owner Tim Withey. “I didn’t have the luxury of having a parent own a brokerage from way back when to get handed down to me,” he told Insurance Business. “Prior to making this move, I was very cognizant that my name was not on the marquee.”
 
The 53-year-old broker established his brokerage with little more than sweat equity, relying on the help of his family – his wife Alison and their 21-year-old daughter Emily – and his business partner, Amanda Brown. 
 
The brokerage sells, home, auto and commercial lines. Tim Withey and Brown have experience in commercial lines. Emily Withey is finalizing the details of her broker license in order to handle personal lines insurance for the new brokerage, which opened its doors on May 1, 2013. 
 
The goal is to bring in gross written premiums worth “a couple of million dollars” by year’s end, said Tim Withey.
 
Stephen Hallsall, upon becoming president of the Insurance Brokers Association of Canada in 2012, said he wished to see more brokerage start-ups in Canada. Insurance Business asked Tim Withey what enterprising brokers can expect when establishing a new book of business. 
 
“You have to be prepared for sleepless nights,” he said, adding that the process is nevertheless “fun” because it essentially takes sales back to the basics – cold calling.
 
“I remember years ago, I asked a very good friend of mine who was an excellent sales guy: ‘What is your secret?’” said Tim Withey. “I felt like I had climbed the mountain and there’s a guru in front of me and he’s going to give me the magic words to sales success. 
 
"His secret was, ‘Two words: phone book.’
 
“I’ve never forgotten that. You have to get moving.”   
 
Tim Withey has been a licensed broker since 1986 and in Huntsville since 1988. Upon landing in Huntsville, he worked at Hutcheson, Reynolds & Caswell Ltd. He then moved to W. Bruce Martin Insurance Ltd., which was sold to Brokerlink in 1997. 
 
Drawing on his considerable experience in the industry, he was able to secure the support of two markets, The Dominion and Northbridge. It didn’t hurt to be a town councillor in Hunstville, demonstrating his commitment and service to the community.  
 
Securing markets to support his brokerage was crucial, he said. 
 
Insurers have to answer to shareholders and so they are reluctant to back a start-up led by a broker who doesn’t have a great deal of experience. Frequently, insurance companies will ask new brokers to commit to high premiums volumes. For many start-ups, the volumes demanded of them are simply too steep. 
 
Tim Withey said insurance companies can help brokerage start-ups by accommodating an appropriate balance of youth and business experience required of fledgling brokerage owners. “I wouldn’t imagine them signing up with someone…who is 21 years old and hitting the ground running,” he said, “but it would also be better if someone didn’t have to wait until they were 53.”