Insurance Agent Forum

[Jonny Insurance]

Hi,

I am about to get appointed with an insurance agency to sell homeowners and car insurance....they have about 10-15 carriers....i was offered a 50% commission split on new business, and 30% on renewals.....

Is this competetive in the industry?

I have my own financial planning business on the side, and would be doing this as an extra service to my clients.

Any feedback would be much appreciated.

Thanks you.

[EDM]

What company?

[Jonny Insurance]

They are a local company in Michigan. Not one of the big boys....but represent about 10-15 different insurance companies.

[UpstateNYAgent]

I get 50% new and renewals

30% is ok though really. Keep in mind though that with a lot of insurer's they give like 15-20% on new and 10-15 on renewals so just keep that in mind.

[EDM]

So you get 50% of whatever the insurance carrier pays them?

[djs]

Correct.

Take an example:

Write a homeowners policy for $1000.
The agent (or agency) is paid 20%, or $200 for new business.
You then get your cut of the $200, 50%, or $100.

This may not be to bad if you are writing fairly low volume and the 'office' is dealing with all of the service work. The issue with low volume is they should be covering your E&O, which can be a bit pricey.

If it's all your clients and they aren't providing office / phone / leads / referrals / etc, I would push for a higher percentage.

Dan

[Jonny Insurance]

Thank you for the response. I will be using my own office. Which is basically connected to their building. They have a very good support staff, etc etc....

I will be covered under their E & O policy.....

So at this time i was offered 50% new, and 30% renewals...

So u think that 50% on everything is justified?

[patch36]

You are paying office rent and expenses on your own office and working for 50/30? You can bet the owner/managing agent is spending his time selling Financial & Life where the money is at while he farms out the P&C to those willing to work it for him.

[Jonny Insurance]

Yes.

My mainstream of income comes from our financial planning business(stock, IRAs, bonds, etc etc)

This would be something to do on the side to make some extra money, and to offer another service to my existing and potential clients.

[DJM]

I'd say go with it, but I dont know a whole lot about the P&C side of things, I am a H&L agent.

[insfuture]

I am considering doing the same thing. Actually there are 2 different local shops wanting me to join them. One is mainly commercial and the other personal lines.
Any thoughts on the success of this model??