Is This Fair Compensation?

GoingIndy · 06-09-2009, 08:24 PM

First I'll give you some brief background on myself.

I've been in the insurance business for 7 years. 4 of them I owned my own Allstate agency which was successful, however I decided to sell when the company decided it wanted to focus more on financial services rather than insurance. I was offered a position as an employee with the company to work as a consultant with independent agencies so I got to know that side of the business well versus the captive. I left that job to relocate for personal reasons and took a job as a Commercial Lines Producer with a broker now which leads me to my initial question.

They're giving me $50,000/year in salary for two years. Within those two years I have to sell $100,000 in commission for the agency. While I'm on salary they won't be paying me any of my commission. Once I hit the $100,000 in agency commission, I will then go to straight commission for myself with 40% new, 20% renewal.

This is a big agency so they do offer support in the way of a CSR however there isn't any marketing or leads provided. I would have to search for the business myself.

Do you think this is fair based on my experience? I forgot to add that all of my experience is in Personal Lines with small Commercial (BOP policies and small fleet). The type of business you'll find any Allstate or State Farm agent selling.

Because of the state of the economy I was willing to take a cut in salary because I needed a job but this isn't cutting it to afford my bills. My previous job was paying me $65/year, with a company car, company cell phone, company laptop, gas card and a bonus at the end of the year that averaged $10,000/year. I know you're probably thinking what the hell did you leave that job for? Like I said, personal reasons and it was the best thing for me and my family.

I know this is long-winded and I appreciate anyone's feedback. Thanks.

By the way, the state I relocated to is NY so you can imagine the expenses I have to deal with by living here.

dgoldenz · 06-09-2009, 08:35 PM

Do you have to pay back any of the salary they're paying you if you don't produce $100k?

GoingIndy · 06-09-2009, 08:36 PM

No.

djs · 06-09-2009, 09:04 PM

Commercial is a bit tricky. I'd like to see you earn a bit more upfront. Part of this depends on who is doing all the legwork though. For instance, are you ordering all of the loss runs or is the CSR? Who is doing all of the certs?

On renewals, who does all of the renewal certs? Who presents the renewal offer to the client? Who calls when the bill isn't paid? Who does the client call when they need to make a change?

Bottom line though is: If you turn this down, what do you go do? Can you work this for the first 2 years?

If you were in California, we could talk. I'd probably pay you a bit more, but that 2 year payment guarantee wouldn't be there.

Dan

GoingIndy · 06-09-2009, 09:42 PM

The account manager handles all of the things you mentioned up above except for presenting the renewal.

You mentioned paying me a bit more. How much more?

I really can't wait two years for this thing to solidify. I wish I could because it's a great opportunity and if I was a bachelor still it wouldn't be a question but I have a family to think about now.

Any idea's on what I could go in and ask for to make things work? I would rather have it be a lateral move salary-wise and get $65 in exchange for maybe one year guaranteed.
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Or rather than $50 each year with a $100,000 threshold, how about $65 each year with a $130,000 threshold?

briko3 · 06-09-2009, 10:42 PM

Have you asked them if they would do that? I think it would be worth it to ask. Just tell them that NY is costing more than you can afford on $50,000 and tell them that you foresee doing well and would like to trade the $50K for 2 years for $65 for one to help your family get situated.

I think in the long run, the risk for them isn't that much more.
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They should especially have no problem if you have a proven track record of success.
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They should especially have no problem if you have a proven track record of success.