10 & 8% does not equate to 80/20. ??
Producers Worth It?
- Thread starter insurancemansam
- Start date
10 & 8% does not equate to 80/20. ??
80/20 on life products
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my rent is only $200 and even after all my bills it's about 450. We operate all over the entire country instead of spending all that money on overhead we spend it helping our businesses and clients grow
- 1,581
I had a producer who paid 100% of the new business commissions and 25% renewal. It worked out great for me, although he switched careers after 2 years.
However, giving 90% of the renewals too is just stupid. My stance is give them the full up front if you're not giving a salary (how are they supposed to live?) Then, make your money on the renewals.
However, giving 90% of the renewals too is just stupid. My stance is give them the full up front if you're not giving a salary (how are they supposed to live?) Then, make your money on the renewals.
My thoughts exactly, I started my agency after I asked my old boss for more commission. I had lots of business and after 1 year wasn't making much as I was getting only 20% on renewals, (new business was 50/50/). I did an account for a hotel that had wind damage to its roof, he was without insurance for 1 whole year and he found my name in his contacts and called me, I told the boss he said don't waste your time. But I still went ahead and helped him out and it was a 50K annual policy 10% commission to the agency.
I just asked him politely if its ok I can get 70% commission because renewal it'll be 20% and I just recently got married and all. He blew his lid telling me, "are you crazy, what makes you think I'd do something like this, I can't believe you even asked me that question you should know better".
He tried apologizing the next day and I told him forget it, and I left and went to the grocery store and got a call saying, "I think we have to part ways as I wasn't getting a good vibe, etc". Supposidly that day I went to the account across the street for personal matters of adding my wife back on my tax returns because she got her social security so filled an amendment after I left he went to my accountant and asked what I was their for. Based on the assumption I was filing paperwork to open my agency he fired me.
But now I BOR'ed my business and happily working for myself! :P
I'm a strict believer for paying producers for what they do its a difficult business to establish and if you turn down their motivation when they don't even see a single fruit they will leave, stagnating your agency and leave the industry all together. This is reason why insurance industry is suffering and not having any recruits to fill all those positions.
To me that's when the biggest mistakes it's causing agencies to fail from so much overhead. First of all you have a ton of salary that you have to pay and they are doing most of work and if someone leaves cause you're not taking care of them it cost a lot of money to retrain someone. However if you pay them well what they're worth and commission they will stay with you for a long time. Specially if you give them rentals and help them understand this is a long-term career decision not just a job. This way is the agency makes money they make money and if they don't make any money then you are not stuck with a bunch of overhead
RickGerlock
New Member
- 18
90/10 seems unsustainable. Even at great retention you will lose that 10% in chargebacks let alone servicing/E&O etc etc. At that point you might as well hire a few CSR's to take info and sell the policies on your own. Unless of course you get profit sharing at several carriers then I can see it making some sort of sense.
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