Commission?

[wwgsrevo]

I know that I could search for this, but I already have, and there are too many varying answers and untrusted sources.

Can someone give me the breakdown of commissions on p&c, home, life?

This is for an agent that is on straight commission.

Also if anyone can specify what commission is paid depending on which company? i.e. State farm, allstate, progressive, nationwide, amfam, etc.

I am currently an "agent team member" and want to make more money. The work involved with this job is not worth 30k/yr with no renewals. but its a good start for me since I am new and learning fast. but in about a yr or so, I want to move to become my own agent. What do you guys recommend and how?

 

[Josh]

Take that $30k/year * at least 10% plus health insurance and that'll give you roughly what you'd have to "net" to be "even". You'd also have to factor in marketing and other expenses to give you a rough idea of apples to apples income.

Most agents would make more money doing what you're doing now than what they end up doing.

If you're serious about going out on your own you should talk to some clusters and indy shops to give you an idea of what you're looking at in real numbers. Most of the companies you listed are captive shops and you're pretty unlikely to be able to open shop that way.

 

[shawnmwalker]

Good Question!

When I worked for a carrier as a rep and another as a Sales Manager agents would often ask, how much commission do you pay. The General answer is 15/15. 15 for new business and 15 for renewal. The Reality is every company has a vast matrix on what they pay on certain risks. Youthful driver, certain credit score, ext.

30k, no renewals.... Time to call a cluster and build your own agency. You will make more in the first year and own a book.

 

[Josh]

15/15 sounds high. 15/10 is more in line with what I've heard or 10/10 with the captive shops like Allstate, but the bonus potential being significant.

 

[VolAgent]

Good Question!

When I worked for a carrier as a rep and another as a Sales Manager agents would often ask, how much commission do you pay. The General answer is 15/15. 15 for new business and 15 for renewal. The Reality is every company has a vast matrix on what they pay on certain risks. Youthful driver, certain credit score, ext.

30k, no renewals.... Time to call a cluster and build your own agency. You will make more in the first year and own a book.

I know you are here to pimp your cluster. So will you put that in writing for the OP and post the agreement here on the forum?

Starting out, he will have to bear all the overhead with no renewals. He might gross 30k, but he is really going to have to hustle to net 30k. Using your 15%, he'll need to write 200k to gross 30k. Depending on his expenses, he might really need to write 300k to 400k of premium. While he does have experience writing insurance, he doesn't have experience doing it all on his own. We don't even know how much or how little support is provided by the agent.

 

[shawnmwalker]

Cool Consider any of these options:

Why join a group? What other options are there?

What are your options?
1. Buy an Independent Agency
a. Got to Agentequity.com to find one big enough that the carriers are well fed and plan on staying around after the new owner takes over.
2. Start from Scratch
a. Very difficult to get and feed multiple markets and get additional compensation for years
3. Join the RIGHT group
a. Many Markets, more compensation from day one, ownership, Lower than street cost for common agency tools.
4. Stay Captive but Switch carriers.
a. I had an agent ask me once, “Is it what you do or where you are at that you don't like?”
b. Will another captive carrier culture make you happy?
5. Join an agency or group that does your backroom support
a. Take a large commission cut
b. Often no ownership
c. Often no overrides
d. Often no bonus
e. Often no additional compensation

Why do Aggregators work for all parties involved?
1. The Carriers like it because:
a. Good groups Vet the agents.
b. Good groups ask their agents to be concerned with and control their books of business
c. Good Groups line up the correct products with the correct business plan
d. Good Groups can sell the Carriers product faster by offering more money and exciting 100’s of agents at a time instead of mom/pop shops. (One agent at a time)
2. The Agents like it when they join the right group because:
a. There is more money from Day one.
b. More access to carriers from day one.
c. There is training and support from Day one to help an agent through the learning curve.
d. There is no longer a DM making you write Life.
e. There is freedom to run your business the way you want.
f. There is little to no commitment to produce.
3. The Good Group likes it because:
a. They get a % of the pie.
b. They can negotiate the power of the group with more agents and more geographical spread and share the benefit more.

There are so many options when starting out and going Independent! Slow down and consider them all!

My Retort to your concern writing 200K in WP in one year...

“My largest year with my captive carrier was $377,000 in written premium. Even during my non-compete period I wrote $395,000 in written premium with ONE of my many carriers. ” - Former Captive Agent

 

[Josh]

Shawn, I think you're missing a KEY point here, this is an employee that probably has an employee mentality that's thinking about the grass being greener. If you want to make serious money as an independent agent, you can't just be hungry, you have to be starving. You need to have a solid plan, work hard, work smart, have good funding, and work work work. The employee mentality won't get there. If that person isn't ready to run at that full speed with the drive and resilience to keep that pace up, it's not going to be a success story.

 

[shawnmwalker]

I agree with everything you said!