Carrier says move the business or 1% commission at renewal!!

[NY independent]

One of our directs, a super regional, calls me and says we've identified a number of HO3's that are severely underpriced and we no longer want them. If you leave them on the books, you will receive 1% commission at renewal and they will be non-renewed within the 3 year anniversary period (NY). I don't think I have to tell any of you how that conversation will go with the clients. Pricing will be 4X more than what ABC insurance co is charging. Remember, no non renewal notice for 1/2/3 years on them. I guess I have to eat the 1% commission at renewal in absence of a non renewal notice. We are not permitted to charge fees to clients per our agency contract.

 

[marindependent]

My opinion of this somewhat depends on how large a percentage of your BOB this is.

Its Nuts! If you know the clients well -I would explain the situation to them and privately tell them that you are going to do the right thing here. [Then follow up and ask if they use Yelp or need any Term Life Insurance.]

Obviously - I would not write this insurer anymore.

I fear that there are lots more of these situations coming for all of us P&C agents nationally.

 

[IvanZhang]

I thought Kemper cut the commission to 2%. now it is 1%?

 

[Markthebroker]

 

[Markthebroker]

Well, it's slightly better than a non renewal. If you are too busy to market a renewal, you can just leave it there. Sucks either way. Damn.

 

[shawnmwalker]

Separate scenario but relate to 1%

I used to walk into an agency office when I was on the carrier side, and say, "I can see you are rolling my book. There is no question in my mind it is happening. I am dropping your commission to 1%. You made a business decision, that is forcing me to make a business decision."

That always pissed off an agent.

 

[Allen Trent]

Separate scenario but relate to 1%

I used to walk into an agency office when I was on the carrier side, and say, "I can see you are rolling my book. There is no question in my mind it is happening. I am dropping your commission to 1%. You made a business decision, that is forcing me to make a business decision."

That always pissed off an agent.

wouldnt that actually net the carrier less on the commission reversals of policies cancelled? IE: if $1,000 renewed at 15%, you paid the agent $150. if drop to 1% contract & policy is cancelled mid-term around 6 months, wouldnt you only claw back $5 instead of $75

 

[Markthebroker]

wouldnt that actually net the carrier less on the commission reversals of policies cancelled? IE: if $1,000 renewed at 15%, you paid the agent $150. if drop to 1% contract & policy is cancelled mid-term around 6 months, wouldnt you only claw back $5 instead of $75

If the carrier is actually making money on the policies then yes. If not, then no.

 

[Allen Trent]

If the carrier is actually making money on the policies then yes. If not, then no.

Lol. Carrier not making money. I have read lots of media reports that carriers make money hand over fist between not oaying claims as a business model & making massive coin in the stock markets with the consumers premiums. Glorified ponzi scheme

 

[scagnt83]

Man. P&C is crazy compared to L&H. Its interesting how dynamically different the two sides of the industry are.