Why is P&C So Terrible

[the mayor]

This is a great thread.
Excellent input, especially from FLInsa and Bertolinoins.
Honestly, if I had read this a year and a half ago...I might not have joined the industry. But I knew it was going to be hard work and had an agency owner that put together a good package for my success....but it was still all up to me to make it work.

 

[DiegoInsGuy]

This is a great thread.
Excellent input, especially from FLInsa and Bertolinoins.
Honestly, if I had read this a year and a half ago...I might not have joined the industry. But I knew it was going to be hard work and had an agency owner that put together a good package for my success....but it was still all up to me to make it work.

Would you mind sharing any details as to what that package consisted of. I currently work in an agency that I am paid 75% commission on new business whatever the term of the policy is, 6-12 months. I x-sell the existing book, I get 25% if it is just a re-write. It is all personal lines and some Life. Nothing on renewals. I also take some overflow calls that our CSR's can't handle. Just wanted to see if you think it is a fair gig. or if you think I should try negotiating something different. I really like the idea of having renewals kick in.

 

[Indiana_Adam]

FLInsa, when you say a 100K a month in P&C premiums, are you talking mostly/only commercial? 100K in personal lines would be closing 3-4 policies a day for me. Here, the average auto is about 400 or so and avg. home is maybe 600. If you have a team backing you up, I can see that being possible. A 1 man team....person would never sleep or see his family between the selling, servicing, and prospecting. Maybe just my newbie perspective.

 

[FL P&C Broker]

I am close to Tampa and our average policy is around $1300. That includes the small flood and umbrellas that lower the avreage. Our average home owners is probably closer to $2k. The further south you get the worse it gets. I just quoted a POS home in miami and the premium was $5400.

 

[CaptiveGuy]

This brings up an interesting issue, do carriers pay the same across the board? Does travelers pay for example pay 15% in areas that have high premiums and the same in rural areas with lower premiums?

At my old carrier it's regional but as an independent now I think the areas with smaller premiums are at a disadvantage but they typically have a lower cost of living too.

 

[BTFuzz]

FLInsa, when you say a 100K a month in P&C premiums, are you talking mostly/only commercial? 100K in personal lines would be closing 3-4 policies a day for me. Here, the average auto is about 400 or so and avg. home is maybe 600. If you have a team backing you up, I can see that being possible. A 1 man team....person would never sleep or see his family between the selling, servicing, and prospecting. Maybe just my newbie perspective.

No it's not your newbie perspective. Writing $100k in PL in a month is possible only if you have the proper team and resources. I am very small and my business is in Amish country PA. So there is no way I'd ever sniff those numbers.

However, if you are an big established agency with producers or sales people who only sell and have csr's and AE's to service, cross sell, etc, do business in a high premium area and are able to sell to a starving crowd I'd say this is quite possible.

Even so, those are terrific numbers especially if you have a high retention and are profitable.

 

[infoe]

Yes as I read this thread I was answering to myself..alot of people are skeptical of 100k because their average premium is so low. I'm from S. Florida and I know what premiums are like there...my agency is currently in Dallas Tx...not as high as Houston but still higher than other states in the union. Still definately lower than Florida however. FLAinsure I wonder if I could call you and pick your brain for 5-10mins most..I'm captive now but looking to purchase a franchise insurance agency in Florida that is taking on big.

 

[Bertolinoins]

FLInsa, when you say a 100K a month in P&C premiums, are you talking mostly/only commercial? 100K in personal lines would be closing 3-4 policies a day for me. Here, the average auto is about 400 or so and avg. home is maybe 600. If you have a team backing you up, I can see that being possible. A 1 man team....person would never sleep or see his family between the selling, servicing, and prospecting. Maybe just my newbie perspective.

It can be done in Fla, along the gulf coast and in parts of CA. I am in Northern CA in a city that is in a major flood plane... so premiums are high and almost every homeowner has to buy flood insurance. The average personal lines account (home, auto, umb, flood) in my agency is about $3300 per year. We concentrate on commercial but manage to write 10-12 new business PL accounts a month for about $30K total. The big PL agencies in my city can do 100K a monthly pretty easily with 2 fulltime producers and CSR's doing the back office work.

 

[Guest]

As with any business....it isnt easy and you have to work at it....maybe after that 5-7 year mark, you might not have to work as hard, but you still have to work......

If you want it easy, well, win the lottery.....

 

[KIA]

I don't pay a base salary. My producers either have a book of business they are rolling over or they have a way to last the first year until renewals kick in. The only "green" producer I have hired was a NYL agent that wanted to get into P&C... she is married to an attorney and can afford to build a book of business off of commission only.

IMO- A large base salary is the kiss of death for P&C producers. Unless a guy has a book of business to roll over or poach from (if he was with a direct writer) then they will have a tough time getting through the first 3 years if you are expecting them to turn a profit for you.

I know this is an old thread, but I was hoping you could elaborate on where/how you are finding producers with an existing BoB and that are willing to discuss rolling it over.

I'm sure once I find producers willing to entertain a discussion I wouldn't have any problems, but how exactly do you go about finding the producers with an existing book?

The only idea's I've come up with are:

1. Checking my own network through business contacts and such - no producers out there, at least not willing to leave their current position.

2. Job Ads - I think this is a very ineffective option

3. Scoping out good producers and poaching them from their current agencies (calling them up, asking to meet for lunch, and talking to them in private) - though this is a little...shady?


I'd love to hear what you guys think about this and how you go about finding producers with an existing book.