Help, Starting As Producer for State Farm Agent

[Texas Insurance Dude]

Honestly getting commission as a personal lines p & c producer in an agency is somewhat difficult. The commission is not that big to begin with and they are paying for office overhead, support staff, lead generation, etc. The agency will often be losing money on a PL producer for at least the first year.
Life insurance is different, but it sounds like you are going to be primarily focusing on P & C?
That being said, this is a learning experience that is giving you an opportunity to get in the business. I would look for some of the things I listed above. A reasonable guarantee on salary to give you an opportunity to get things going and get trained. Six months, at least.
Somewhere that will be providing a steady stream of good quality leads that you can work. You will also need to be developing you own sources for referrals and new business.
Hopefully, they will have a service staff that will be handling the servicing for you, so you can focus on selling! Servicing policies is very time consuming.
The salary should be a base with bonus potential after meeting your minimum production goals. Discuss with the agency how your compensation is designed to grow over the years. A good agency will not want to lose a good producer. Interview the agency, dont just let them interview you.

So, work hard, sell a lot and things should go well. Good luck!

 

[dadkins131]

Re: Please Help- Starting As Producer for State Farm Agent

I think I'd run from this offer. How long is he willing to give you that salary if you're not meeting production requirements? Do you get any renewals from the P&C? What portion of the life commission do you get? How much is he going to be there for you when you have questions, need help? Where are your leads going to come from? How many other producers are in the office, how successful are they? How long has he been with State Farm, is he a TICA that is in danger of getting canned?

If you got a street life contract at 70% (which you can do better, but sounds like you need a lot of hand-holding).

4 life apps x $1,000 yearly premium = $2,800. More than his salary
10 life apps x $1,000 yearly premium = $7,000.

I suspect that if you write this guy 10 life apps and 20 P&C apps, you won't make 7k total. Now, I will say that the life apps you write with him will probably be for lower premium amounts. State Farm just wants apps, they don't care about the premium amount at all when it comes to life.

So, only you can decide if this is a good offer for you or not, but just make sure what you get is worth what you are giving up to get it.

Your not factoring in the cost to acquire a customer, and run the day to day.

 

[Full Throttle]

I have a friend that has a mature state farm agency. During one month last summer, his office (him and two licensed sales assistants) wrote over 100 lives in a month! This was a life insurance company wide blitz month and many of those were term conversions, but 100 lives in a month is definetly impressive. If it's a mature agency, I would say those can be realistic goals.

As others have said, it would be a way to get your feet wet in the business, get live practice selling, and prepare you for going into production on your own. It doesn't sound like an opportunity that will make you a lot of money.

 

[pesmay]

What i am worried about is security. I can not take a job with unreasonable expectations for someone who is new to the business and go from a steady income to nothing in a horrible recession. Thats why i am putting in so much research to make the right decision. I also dont want a pay cut so the job has to pay at least equal to what my current position does. What worried me the most was that someone was let go after 3 weeks. The salary is for the year and will be fine i just have to be able to write 10 life apps a month to receive the full 10% commission which you are all saying sounds doable. I just need to make sure that the minimum production requirements of 20,000 in p&c commission is reasonable? I really want to get my feet wet and learn the business until i can go indie.

 

[VolAgent]

Re: Please Help- Starting As Producer for State Farm Agent

Your not factoring in the cost to acquire a customer, and run the day to day.

You're correct, but all I talked about was life. A life agent is not going to run his business the same way as a SF agent. Even buying leads, I can't see your costs being near as high.
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What i am worried about is security. I can not take a job with unreasonable expectations for someone who is new to the business and go from a steady income to nothing in a horrible recession. Thats why i am putting in so much research to make the right decision. I also dont want a pay cut so the job has to pay at least equal to what my current position does. What worried me the most was that someone was let go after 3 weeks. The salary is for the year and will be fine i just have to be able to write 10 life apps a month to receive the full 10% commission which you are all saying sounds doable. I just need to make sure that the minimum production requirements of 20,000 in p&c commission is reasonable? I really want to get my feet wet and learn the business until i can go indie.

You are going to have to work to generate 10 life apps a month. I'd try to write some child policies for families where the breadwinner already has a life policy.

You are right to be worried about someone being let go after 3 weeks. It may take you several months to get up to speed and production levels. How long will the agent give you to get up to speed, are there any stepping stones where you can show progress and keep your job while you are working up to the target production?

 

[pesmay]

the agent says they will work with me the first month. They mentioned around 8-12 policies the first month. I am going to meet with them again and see if we can negotiate some stepping stones as you mentioned.

 

[Norwayguy]

the agent says they will work with me the first month. They mentioned around 8-12 policies the first month. I am going to meet with them again and see if we can negotiate some stepping stones as you mentioned.

Work with you the first month...Do they mean that they will be generous and have lower goals the first month or do they mean they will work with you to help get you up to speed, mentor you etc....Not sure if you mentioned you had p&c experience or not but it could take some time just understanding the different offerings and discounts and systems in place.

Also you mentioned you will earn either 10% or 4% of the commission if you sell enough policies....I believe SF has a variable comp but the high end is 11% of the premium so lets say you hit minimums 20,000 per month SF pays out $2,200 your cut is $88. Realize that after a few months you are building their business I don't remember hearing anything about renewals will you be signing a contract? Have you read it can your comp be changed? How can you monitor it?

Years ago I sold Industrial Automation equipment to automate factories I was inside sales and paid salary plus a little amount of commission. The only thing is I knew roughly how much I entered in sales and my commission never matched.

 

[Ferrara Flower]

I was just offered a position with a state farm agent in AZ with a base of 24k a year. What i am worried about are the production requirements. I would need to produce 20,000 - 30,000 in new P&C and 20 policies and would need to have a minimum of 4 life apps per month. I would receive up to 10% of the P&C commissions if i write 10 life apps a month. 4% if i write 4 apps and etc. etc. Is this reasonable? It is my first year in the industry. I dont want to take something and find out the expectations were not reasonable. Thanks for the help

 

[Ferrara Flower]

OK, so your question is from 2010. Here it is 2022 and I'm kind of in the same boat. I get paid $13/hr (way less than McD's). When I start working for commission, I'll get $20k a year and will only get a 3% commission if I sell $20k in premiums each month and ONLY on "New Business". Is that a rip-off?