Diary of a New Agent .. I'd Like Your Advice.

[Guest]

MAN, These newbies are clueless, come on here and ask for advice and argue when they get it and because someone (me) makes a comment that their post is a friggin novel, they get their panties in a wad....

How in the hell have you survived the stresses of life and this business?

cry babies

 

[Norwayguy]

No. only those commissions will be the method of compensation after salary period ends.

P.S. I appreciate your interest in helping. Sorry for the late reply. There was a bit of sanitizing that was needed due to the off-gassing stench from a certain bloated ego.

Bladerunner,

The item you mentioned that concerned me the most is the varying of commissions based on the total policy sales as opposed to premium numbers...I can understand it now as he is paying you a base amount and if you are not producing enough at a high commission to leave his cut to pay off the salary and service the policy. But I would think that would need to end once he no longer covers the base salary as the overhead should be pretty well defined at that point and you should have a commission rate that is stable.

I would recommend reading and rereading your contract. I don't think your situation is terrible but I'm sure there are other agencies out there that will let you produce for them with a better deal.

 

[BladeRunner]

Bladerunner,

The item you mentioned that concerned me the most is the varying of commissions based on the total policy sales as opposed to premium numbers...I can understand it now as he is paying you a base amount and if you are not producing enough at a high commission to leave his cut to pay off the salary and service the policy. But I would think that would need to end once he no longer covers the base salary as the overhead should be pretty well defined at that point and you should have a commission rate that is stable.

I would recommend reading and rereading your contract. I don't think your situation is terrible but I'm sure there are other agencies out there that will let you produce for them with a better deal.

Hey Norwayguy,

I don't understand either why the agency is so hung up on policy count and not premium dollar amounts. I think the latter would be more important. It could be that achieving a policy count per month is much harder to obtain than actual commission dollars, and therefore knowing most agents won't hit their policy count, it's less commission percentage for the agent and more money to the agency? What do you think? Most agents rarely make or exceed 30 policies a month, despite high commission dollars.

It doesn't affect a newer agent with a small book as much as a senior agent. Where it really hurts a paycheck is when an agent's book of business is big. The small fluctuation in percentage amounts for not hitting policy count per month can take hundreds if not thousands of dollars away from an agent's pay that month.

If an agent works for a stable commission amount, what method does the agency use to motivate agents to sell more? I'm sure that's why they have it structured like this. The owner tells us we have a good gig, compared to, let's say, a State Farm, Farmers, etc., with all their overhead expenses, but I have nothing to compare this structure to.

One avenue I was considering is being a solo, independent insurance broker. I hear agents are successful at it. Any thoughts?

Just curious, what type of arrangement are you working for?

 

[Guest]

Don't, most captives still use Policy count and not Premium, Farmers does.....

 

[NCAgent]

Policy count is going to be better for a reason.

Imagine this:

You have 20k on the books for a month in written premium spread out over 10 policies. That is 2k per policy avg. Now imagine the same thing over 3-4 policies instead. Which is going to be a bigger hit for renewals and chargebacks? It allows for a better contingency if people leave (and people WILL leave.) That is one of the problems with commercial accounts. A 15-30k commission account is nice but you're gonna be hurting if and when they leave. PL gives a lot more stability because the money is spread over more clients rather than a few behemoths.

It helps to get a stable book, not just a large book. And with the same example, how many life policies, medd supps, annuities, etc.etc. can you sell to 3-4 policyholders vs 9-10, with all other things being equal? Or other policies? So the cross-selling is better as well doing it that way.

More stability, more options to sell, more money overall.

Does that help?

P&C is treated like a commodity. The rates change, you drop the company and leave, no problem, whether it was your fault or not. Someone else will take you and it will be like nothing ever happened. You are pretty much always going to be able to get new coverage at a similar or better rate. It's a lot different than life and health where you are pretty much guaranteed to pay more because of things going downhill.

 

[Full Throttle]

BR,

I'm not a P&C producer and can't help you with the specifics, but I do know that you will never be satisfied until you are building a book of business that you actually own. You've proven that you can get the business written. It seems like the question is how to get there since you do not have the savings to float you if you cut the cord now and started working on your own book?

No one will just give the salary at no cost, so unless you can borrow the money from someone you know (can be tough), you are stuck building someone else's book in the meantime, whether captive or indy. Like I said, I'm not a P&C guy, but it seems like you find a smaller indy shop and present a win-win deal for both of you.

Maybe they give you a non-forgivable draw in exchange for a larger percentage of the commission, with an agreement that if you it certain metrics within X amount of years, it will be adjusted. But you own the book. I would imagine there have to be some older P&C agents looking for an exit strategy that would welcome a hungry producer who has proven he could sell. You might have to pick-up the phone to find them.

Otherwise, you are stuck building a book for someone else until you get to your savings goal. I would figure out how much you need in savings to get started on your own book, double that number, then start saving to reach that goal. Trim down your lifestyle as much as practical with the end goal in mind.

Good luck. I'm sure others can give you much more specific advise.

 

[sman]

Thanks Larry for bringing back some confidence in this site. I was beginning to question the sincerity of this site after the condescending remarks from Mr. Wonderful and his little one-liner, twitter-esque, 5 posts a day, thumb-jockey side-kick.

I'm certainly not picking sides here, but if 5 posts a day is a bad thing, then you might want to be careful. You posted 5 times today and 6 times yesterday.

And multiple posts per day doesn't mean someone is a failure in the business. It could mean just the opposite. They have built up a book of business that pays them well and have lots of free time.

Just sayin'

 

[Guest]

I'm certainly not picking sides here, but if 5 posts a day is a bad thing, then you might want to be careful. You posted 5 times today and 6 times yesterday.

Just sayin'

 

[Denise509]

BladeRunner,

In my opinion, you have done great so far. You came into the insurance world with no experience and are selling like a pro. I think that the hardest part is just taking the risk of starting your own business, but in the long run its worth it (sounds corny I know ) I wouldn't recommed working as a captive, you'll be limiting yourself to only one company. I've been down that road and trust me, you'll save yourself a lot of $$ by not even going there! Even though they may tell you that you don't have strict quotas to meet, make sure you check with other agents in your area before considering going that route. You mentioned that you already have appointments with big carriers. That's a big advantage because getting appointments is pretty much the hardest part of going independent.

 

[BladeRunner]

Policy count is going to be better for a reason.

Imagine this:

You have 20k on the books for a month in written premium spread out over 10 policies. That is 2k per policy avg. Now imagine the same thing over 3-4 policies instead. Which is going to be a bigger hit for renewals and chargebacks? It allows for a better contingency if people leave (and people WILL leave.) That is one of the problems with commercial accounts. A 15-30k commission account is nice but you're gonna be hurting if and when they leave. PL gives a lot more stability because the money is spread over more clients rather than a few behemoths.

It helps to get a stable book, not just a large book. And with the same example, how many life policies, medd supps, annuities, etc.etc. can you sell to 3-4 policyholders vs 9-10, with all other things being equal? Or other policies? So the cross-selling is better as well doing it that way.

More stability, more options to sell, more money overall.

Does that help?

P&C is treated like a commodity. The rates change, you drop the company and leave, no problem, whether it was your fault or not. Someone else will take you and it will be like nothing ever happened. You are pretty much always going to be able to get new coverage at a similar or better rate. It's a lot different than life and health where you are pretty much guaranteed to pay more because of things going downhill.

NCPCLHnoob,
Yes, you make an excellent point. I can see that. Fewer, larger commission policies will hurt hard when the client leaves. And often it takes allot of nurturing, time and ; energy to write and close a larger deal, so there is less time in a given month close those. Thanks for the advice.