Insurance Agent Forum

[BrokeLoser]

I've been lurking here for a while and have read many posts about "starving" agents making "no" money. I'm recently licensed in CA - P&C / L&H. I haven't decided on my exact direction quite yet....but one of my best friends that got licensed and got me thinking about the insurance biz just finished his 21st day working out of a Farmers district office as a 'reserve agent'....he has averaged one policy per day since he actually started working. His business overhead totals $450 per month. He says its quite easier than he expected it be....quite the contrary to what it seems most have to say here. I've read here that 'breaking even' your first year is what most can expect. Anyhow, my point is; like educational degrees and 'licensed required' types of bussinesses are most getting licensed and thinking that that means because you're licensed your bank account automatically fills up with cash? Are people working or just 'waiting for the phone to ring?' Some things I've read here are really starting to get in my head and I'm just trying to get a handle on it all. I'm certainly not planning on going into business to 'break even'.

[xrac]

Originally Posted by BrokeLoser

.......I'm certainly not planning on going into business to 'break even'.

That is the right attitude. If you feel like that why have you chosen brokeloser as a screen name? If that is he way you feel about yourself the first order of business is to change that.

[BrokeLoser]

Originally Posted by xrac

That is the right attitude. If you feel like that why have you chosen brokeloser as a screen name? If that is he way you feel about yourself the first order of business is to change that.

That's sort of an inside joke; it's intended to be of facetious nature. My friends always refer to me as the "successful one" and I always say; "Nah, I'm just a BrokeLoser."

[xrac]

Originally Posted by BrokeLoser

That's sort of an inside joke; it's intended to be of facetious nature. My friends always refer to me as the "successful one" and I always say; "Nah, I'm just a BrokeLoser."

Good to know that, you had me worried. Still, it may be good to remove that terminology from your vocabulary.

[somarco]

You can go broke in a hurry, make a lot of money in a short time or make it over the long haul.

It's all up to you.

[BrokeLoser]

Originally Posted by somarco

You can go broke in a hurry, make a lot of money in a short time or make it over the long haul.

It's all up to you.

Some here make it sound that nobody can possibly make any money in their first year. That's a bit concerning to me. My buddy sits in an office with 11 other agents, he says while he's sitting there pounding the phone setting up deals the others are sitting there looking around the office at each other shifting paperwork back and fourth across their desks and checking their email and the fax machine 100 times a day. That seems to be the case in any sales environment. You have the pro's that are willing to work for what they want and are willing to go get it and the others that just expect what they want and wait for 'it' to come to them; it usually doesn't. I guess you can never deny the ole' 80 / 20 rule. I'm not trying to be insulting towards anyone, I'm just trying to figure things out and enter the biz with a positive proactive mindset.

[djs]

just finished his 21st day working out of a Farmers district office as a 'reserve agent'....he has averaged one policy per day since he actually started working. His business overhead totals $450 per month.

Don't misinterpret what a lot of people do versus what is possible. A lot of people start in the insurance profession thinking they will make a lot of money, and simply forget they have to work a solid work week to make this happen. If you don't work a full 40-60 hours a week when you get started, you will be doing good to break even.

On the flip side, people come in and make over a $100K their first year. This is not the norm either, but very possible, if someone is a real go getter.

Back to your point.... and I don't want to bust any bubbles, your friend is doing great, and it sounds like he will do well, but I did want to give some perspective.

- P&C is an easy sale. I know, I sell P&C. It's much easier than health, and easier than life. Writing 20 to 30 policies a month is very realistic. To write more long term will require some help, but it's very doable.
- The first 30 policies in P&C are the easiest. These are usually to people you know, or at least have very little separation. It then gets a bit tougher as you figure out how to market, then it gets easy again to find new policies. You do have to have marketing strategy though.
- As you build a book of P&C business, the service on existing customers can become overwhelming, which slows down new sales. I've seen agents get stuck here, the trick is to have someone else deal with 80% of the service work, you, as the agent, focus on selling.
- His business overhead will go up. I assume the $450 is some form of office rent. He'll soon have E&O to pay, marketing expenses, and a few other expenses to deal with. It doesn't take much for overhead, and in fact the key to success is investing in your business wisely and keeping your overhead low.

Good luck! Jump in!

Dan

[BrokeLoser]

Originally Posted by djs

Back to your point.... and I don't want to bust any bubbles, your friend is doing great, and it sounds like he will do well, but I did want to give some perspective.

- P&C is an easy sale. I know, I sell P&C. It's much easier than health, and easier than life. Writing 20 to 30 policies a month is very realistic. To write more long term will require some help, but it's very doable.
- The first 30 policies in P&C are the easiest. These are usually to people you know, or at least have very little separation. It then gets a bit tougher as you figure out how to market, then it gets easy again to find new policies. You do have to have marketing strategy though.
- As you build a book of P&C business, the service on existing customers can become overwhelming, which slows down new sales. I've seen agents get stuck here, the trick is to have someone else deal with 80% of the service work, you, as the agent, focus on selling.
- His business overhead will go up. I assume the $450 is some form of office rent. He'll soon have E&O to pay, marketing expenses, and a few other expenses to deal with. It doesn't take much for overhead, and in fact the key to success is investing in your business wisely and keeping your overhead low.

Good luck! Jump in!

Dan

Great information; thanks for that.
For now my buddy has refused to write policies to anyone he knows. I asked him about this, he said the DM asked him to first create and work his "warm" list but he said he didn't want to do that until he was sure he would remain with Farmers. Pretty bold of him to tell the DM that after signing a reserve agent agreement.

[jamesflou]

If your friend is writing on average a policy a day he or someone is making some money. That's about what you would need as a captive agent to make decent money since you are sharing half or more of your commission. I know agents who made anywhere from 50-100+ thousand there first year. It depends on what you do. If you stay in front of people as much as possible it can be done. If you make a few good sales and then play golf the rest of the week it probably want happen. If you are independent then you need to average a little over $2000 annualized each week to make six figures. You will have a few lapses, non takers, and declined cases. Go for it!

[patch36]

Originally Posted by BrokeLoser

Great information; thanks for that.
For now my buddy has refused to write policies to anyone he knows. I asked him about this, he said the DM asked him to first create and work his "warm" list but he said he didn't want to do that until he was sure he would remain with Farmers. Pretty bold of him to tell the DM that after signing a reserve agent agreement.

Wellll. a policy a day as a reserve agent might gross him a whopping $20-$60 on an auto. I really doubt he is either doing it or can maintain it, but they may be handing him walk ins and serving up business. DM's will tell you what you want to hear and go along with about anything when you are a reserve agent as they are setting the stage and the hook to make you a career agent.

Good luck, but realize if you think the amount of money your buddy is 'making' is acceptable, you will be an average agent pulling in $24k a year and will fail. I hit all the numbers, sold more than enough life to qualify for the awards and after the advances and commission matches I still owed them money after a 'successful' year.

Have him run a quote for you and then get quotes from the major competitors, including Geico and Progressive. Farmers rates suck almost everywhere and you will be selling what is best for the agent, not the client.

[BrokeLoser]

Originally Posted by patch36

Wellll. a policy a day as a reserve agent might gross him a whopping $20-$60 on an auto. I really doubt he is either doing it or can maintain it, but they may be handing him walk ins and serving up business. DM's will tell you what you want to hear and go along with about anything when you are a reserve agent as they are setting the stage and the hook to make you a career agent.

Good luck, but realize if you think the amount of money your buddy is 'making' is acceptable, you will be an average agent pulling in $24k a year and will fail. I hit all the numbers, sold more than enough life to qualify for the awards and after the advances and commission matches I still owed them money after a 'successful' year.

Have him run a quote for you and then get quotes from the major competitors, including Geico and Progressive. Farmers rates suck almost everywhere and you will be selling what is best for the agent, not the client.

When I said; "a policy a day" I guess I should have said; "a policy holder a day". He said he's making between $300 - $400 per deal...all personal line p&c so far. He hasn't got a single deal given to him. In his words; he's planted and harvested every one. Don't get me wrong; $1,500 - $1,600 per week isn't amazing money either, but for 21 days in the biz that's still a far cry from what you'd think one could earn if you read around here. I asked him about Farmers rates being on the high side, he said they're actually quite competetive with most scenario's, the exception really only being the 22 year old with a DUI. He said; "I don't sell rates anyway, I sell a service and insurance coverage." Bare in mind, he's only been at it for 21 days....I'm sure he hasn't seen it all.

[patch36]

10% for auto and 20% for home. 2 cars and a house a day might yield $300.

P&C has become a commosdity. Good luck to him. the money is in lots of them on the books and the residuals, which takes years, or in big ticket life. Farmers agents not selling lots of life will starve.

[OHInsAGNT]

Originally Posted by BrokeLoser

he has averaged one policy per day since he actually started working.

If he is selling one P&C policy per day, he's taking home less than $20K after the $450 expense. Remember, success has a different definition to different individuals.
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Originally Posted by BrokeLoser

He said he's making between $300 - $400 per deal...all personal line p&c so far.

This seems like an exaggeration. I don't know the rates in California though. I'd say between $100-$200 per sale is more realistic on a 10% captive contract.

[BrokeLoser]

Originally Posted by OHInsAGNT

If he is selling one P&C policy per day, he's taking home less than $20K after the $450 expense. Remember, success has a different definition to different individuals.
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This seems like an exaggeration. I don't know the rates in California though. I'd say between $100-$200 per sale is more realistic on a 10% captive contract.

Hmmm....so you've tweaked my math and called my friend a liar all in one post....nicely done. Entertained?

[djs]

Guys -

This isn't that hard. A single household, with a house ($150 avg commission at 20%) and 2 full coverage autos ($100 avg commission at 10%) gives you $350 a day.

$350 a day times 20 days a month = $7K a month, not counting residuals (which don't exist yet) or expenses.

Writing a household a day is a challenge. It's doable, but a challenge. Probably easier early on, though doing it your first month is amazing.

Dan

[beatuplunchbox]

One of the funniest DSLs I worked with at the captive agency that I started off with summed it up correctly one day when his team was not nearly meeting their production goals as to why a lot of agents fail:

"All I have got here is 14 insurance executives and not one salesperson!"

Too many new agents chase their rear ends by spending too much time doing non revenue generating activity (shuffling papers, arranging their work areas just so, trying to figure out the newest way to generate leads etc.) instead of actively prospecting and selling.

[BrokeLoser]

Originally Posted by djs

Guys -

This isn't that hard. A single household, with a house ($150 avg commission at 20%) and 2 full coverage autos ($100 avg commission at 10%) gives you $350 a day.

$350 a day times 20 days a month = $7K a month, not counting residuals (which don't exist yet) or expenses.

Writing a household a day is a challenge. It's doable, but a challenge. Probably easier early on, though doing it your first month is amazing.

Dan

Thanks djs....didn't know it needed to be spelled out. To go even further because it seems needed; one of his deals last week looked like this: Husband and wife - home, 3 autos, 2 commuters and a pleasure...a motorhome policy....2 kids, both with autos...1 more house in Bass Lake, CA, another auto kept there and a boat. Now, how much would you make on this one deal? I know it seems far fetched to some especially the ones sitting on their hands staring at their phone waiting for it to ring. These scenarious are all around us and I believe this is the sh*t you find when you keep looking for it....
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Originally Posted by beatuplunchbox

"All I have got here is 14 insurance executives and not one salesperson!"

Too many new agents chase their rear ends by spending too much time doing non revenue generating activity (shuffling papers, arranging their work areas just so, trying to figure out the newest way to generate leads etc.) instead of actively prospecting and selling.

That's hilarious...and spot on too.
I've seen it over and over again. Guy sits there all week adjusting and readjusting everything on his desk. At the end of the week you bump into him leaving the office and he says; "Man, things are slow."...WHAT...how would you know that? People will spend time doing things that for what ever the reason make them feel like they are atleast attempting to be productive; checking the fax and emails, talking about the biz, paper shuffling...etc and then suddenly the weeks over and there's no REAL production. At the end of the day they are really just scared to actually WORK, afraid of the rejection, afraid to fall short of 'goals'...etc. Bottom line, SALESMAN SELL and thrive on the chase of the next deal....Watch out for executive-itus!

[OHInsAGNT]

Originally Posted by BrokeLoser

Hmmm....so you've tweaked my math and called my friend a liar all in one post....nicely done. Entertained?

No, honestly just trying to help. People have a tendency to be stretch the realities a bit when telling you what a great opportunity there is in insurance. This is especially true if they stand to gain an override. The most important part of the deicision is to be realistic, not optimistic....

[GetInsurance]

You seem to know some serious details about your "friend's" production and workday.

[patch36]

Dr., I have this friend who told me it burns when he pee's. Do you have any advice and medicine I can pass on to him?