Making It Thru the 1st Year "as Earned" - P&C

[AZusa Insurance]

I been looking to transition into IA and been interviewing w/ agencies that provide training/mentoring w/ the possibility of keeping my BoB. The agency that I have found that provide this, offer around 50% comm on NB and Renews on 10-12% of premium. Most say that, on the high side, I should be able to write about $40k in premium a month.

Doing the math, I would be making about $2k/mo. This would be great but these agencies pay as earned. Now correct me if I'm wrong, but that means the $2k would typically be paid over 12 mo., which would mean I would get paid $167 1st mo, $334 2nd and so on. I wouldn't actually make $2k/mo till 12 month and that's if I keep the same production level throughout the year and no business falls of the books.

Now I knew that the 1st year would be difficult and I have 6 mo. of living and marketing expenses saved up, but how does one survive on earned income? Am I missing something here? I mean, based on my understanding, even doing $40k/mo. premium, I'd only be taking home around $1k/mo. in my 6th mo. as earned ($167 x 6). I could keep looking for an agency that pays higher commission rate but most that do offer higher rates, don't offer any training or mentoring. How do most as earned commission only P&C agents make it?

Thanks in advance.

 

[NCAgent]

I been looking to transition into IA and been interviewing w/ agencies that provide training/mentoring w/ the possibility of keeping my BoB. The agency that I have found that provide this, offer around 50% comm on NB and Renews on 10-12% of premium. Most say that, on the high side, I should be able to write about $40k in premium a month.

Doing the math, I would be making about $2k/mo. This would be great but these agencies pay as earned. Now correct me if I'm wrong, but that means the $2k would typically be paid over 12 mo., which would mean I would get paid $167 1st mo, $334 2nd and so on. I wouldn't actually make $2k/mo till 12 month and that's if I keep the same production level throughout the year and no business falls of the books.

Now I knew that the 1st year would be difficult and I have 6 mo. of living and marketing expenses saved up, but how does one survive on earned income? Am I missing something here? I mean, based on my understanding, even doing $40k/mo. premium, I'd only be taking home around $1k/mo. in my 6th mo. as earned ($167 x 6). I could keep looking for an agency that pays higher commission rate but most that do offer higher rates, don't offer any training or mentoring. How do most as earned commission only P&C agents make it?

Thanks in advance.

Sell life in the mean time. I'm going to tell you that you'd do a lot better selling life in addition to P&C both to retain clients and because you get paid a lot of commissions up front with life, usually 6 months to a year. And usually that is approx 80-105% of the premium paid by the client depending on the contract.

Mortgage protection, term life, whole life, buy-sell, all kinds of things you can do. I'm in the same boat where I can work in house and those leads I don't keep, whereas the ones I get on my own I can keep. If you sell 1-2 life policies a month then you'll be set for the first year.

I'm sure many people here would agree. You can also do health but unless you are doing benefits management for businesses as part of your P&C I think doing life will integrate into your P&C a lot easier at this point until you get more established.

BTW the life exam is pretty easy for many people if you got P&C done. E&O for it is very inexpensive as well compared to P&C.

 

[djs]

I'm confused....
Most P&C companies pay the commission on the full policy period, with some exceptions, such as commercial and some non-standard stuff.

This is not an area that most people try to start out in though. Agents tend to start in the standard/preferred home and auto markets, which pretty much all advance the full policy period (6 or 12 months).

On top of that, you are paying a hefty, hefty premium for 'training and mentoring', basically right around $2K a month (half of your commission). Now, the other thing you are paying for here is market access, which is sometimes hard to do, as long as the person you are working through provides solid, competitive markets for you. Without that, you will be toast pretty quickly.

I'm not clear if you have much experience. Writing $40K GWP (gross written premium) a month can be done, but as you were told, it is on the high side. In general terms, this is 40 policies a month, 10 a week. This is actually easier when you start than it is after a few years and you have existing clients to tend to, but it is still a huge challenge. After you start adding commercial, this can be done, but that takes time.

Basically, I've never seen an agent hit the ground running at $40K GWP. It takes probably 6 months to put systems in place to start writing that volume of business. You need to find referral sources, get marketing in place, start networking, whatever it takes to get that volume of business, without going broke doing it. You also need to learn how to write, issue, and maintain your policies, which takes time as well. Then you have to learn to start dealing with billing issues, chargebacks, and claims, all of which take time.

Let us know how much experience you have and we can probably offer better advice on how to realistically get started. It sounds like you've put a lot of thought into this already, which is great. Problem is, it sometimes is hard to know what questions to ask....

Dan

 

[griffinins]

40k gwp in a month will get you your $2k the following month. You will get anywhere from 12 to 15% of the customers down payment and the same with each payment made

 

[Sales71]

That's the price u have to pay to get experience and mentoring. This biz is very hard to do it alone. Do the first year or even two build some client base and maybe go on ur own. Plus they might offer there own csr rep to help with the service so u can focus on selling. Life is not that easy to do. I do about 30k of life a year. I have been in the biz 13 years and going IA next year. Looking forward to it.2k a month when ur new is very good. Good luck.

 

[Bob Klee]

Wow Azusa,

That does not sound like a good deal to me. You are a support staff for an existing agent or have a small BOB on your own? You aren't clear on that. CA agent should give you a lot of opportunity.

$40k a month in P&C is not easy. In Nashville where the Avg. 6 month Premium with Allstate is about $400 that is writing 100 apps a month!! I'm telling you, that is NOT easy by yourself.

I think I'd look around at other/better opportunities.

I also agree that if you are Life/Health licensed that adding those to your products increases your cash flow as mentioned.

Let us know what other opportunities you have. Keep looking.

 

[Guest]

I'm trying to understand how AZusa Insurance is located in California.....

 

[GreenSky]

I'm trying to understand how AZusa Insurance is located in California.....

There is a city called Azusa about 45 miles south of where I live. If I had to guess, the poster is an AZ native that moved to Azusa.

If I'm correct all of you would have to admit that I am the most brilliant person ever to post on the forum.

Azusa, California - Wikipedia, the free encyclopedia

Rick

 

[Sales71]

He is in CA much higher premium than nashville. $1500 two car policy yr.

 

[AZusa Insurance]

Thanks for the response, and yes, I live in Azusa, CA

A little about my self. I've held many sales positions in the past, and the ones that I've succeeded in was due to having great training/mentoring. When I was doing real estate loans, I didn't sell a single thing my 1st 3-4 months. I got a mentor, paid him 50% of my commissions for 6 months and eventually I opened my own shop w/ 7-8 agents working for me (not all at once). When the market crashed, I got a sales position for an insurance co that started a pilot program to sell directly to the public. The manager was the CS mgr and had no sales experience. Needless to say, the Ins Co scraped the program and I transferred to Inside Claims. Had a great mgr and was top adjuster for 3-4 months. Then I trnsfrd to Outside Claims. I guess cuz I had experience as an adjuster, I wasn't given any further training. Mgr was helpful but very busy. My numbers dropped and now I was in the bottom and eventually laid off. I then started a retail biz w/ my wife, w/ no experience, just our drive, hard work and motivation. That didn't work out. Don't know if a mentor would have helped but I do feel we would have done better if we had one. That said, I am willing to pay a hefty price for training/mentoring.

Most of the the agency that I've found that are currently hiring and let you keep your BoB, pay around 70-80% but very little training. I've been able to work out deals w/ them that I would be willing to take 50% for my 1st year if they provide the training/mentoring I'm looking for and re-evaluate after a year.

Now I know 40k/mo premium is very, very difficult. My questions isn't how to make that or how to succeed. My question is, despite becoming a sales superstar from day one and selling $40k/mo, how are you able to survive the 1st year if you're paid "as earned'? Maybe I'm misunderstanding how "as earned" is paid. I can't imagine selling only 20k/mo and making it past your 1st 6 mo getting paid "as earned".

As far as selling L/H, I'm still considering it. But if I do, it'll probably be L/H or P&C, not both at first. I am a firm believer in learning the ins and outs of you product, service, etc. then being a jack of all trades in the beginning.

Thanks