P&C commission question

loudee · 06-13-2008, 12:30 AM

I have a question for you P&C guys. A friend of mine just got interviewed by an Independent agency and some of the commission rates he was quoted seem very high. They were telling him:

Auto - 18% first year then 15% renewal
Home owners - 20% first year then 15% renewal
Commercial - 18-20% first year and 15% renewal

How far off are these and what is the general commissions for these type of policies?

Thanks,
Lou

djs · 06-13-2008, 01:23 PM

I don't know what is paid in PA, so maybe this is the norm for the area, but these are high commissions.

Auto - 10% or so, first year and renewal.
Homeowners - you are about right, 20% first year, 14% renewal average.
Commercial - more like 8% - 12% (lots of variables here).

Of course, right now, there seems to be a lot of 'contests' going on, double commissions, etc. This might be a short term offer.

Sometimes, commissions are paid only on base rate, not on the full rate. I would ask questions, use examples, be very clear on how commissions are calculated and when they are paid.

Dan

RayGroupInsurance · 06-13-2008, 01:47 PM

In Utah it's about:

Auto - 10% new sales and renewals
Home - 10-15% new sales and renewals
Commercial 15-20% new sales and renewals

Steve · 06-13-2008, 06:38 PM

You're right. There are many variables in Commercial. BOP's can pay different than CPP's, and Worker's Comp is as low as 4%, and that's a big piece of the AP. BAP's pay less than Personal Auto.

MaggieMae · 06-13-2008, 07:47 PM

If that is the commission, what is the split, local that seems high from what I have gathered. But the splits around here has been my question, broker=?% sales producer=?%.

loudee · 06-13-2008, 10:25 PM

He told me the split was 50/50.

I can only imagine what an independent agent and a good book can make just in renewals.

Lou

Originally Posted by MaggieMae

If that is the commission, what is the split, local that seems high from what I have gathered. But the splits around here has been my question, broker=?% sales producer=?%.

Soaringagent · 06-14-2008, 03:08 AM

That seems about right.... probably depends on the area.

insureitnow · 06-15-2008, 12:01 PM

Originally Posted by loudee

I have a question for you P&C guys. A friend of mine just got interviewed by an Independent agency and some of the commission rates he was quoted seem very high. They were telling him:

Auto - 18% first year then 15% renewal
Home owners - 20% first year then 15% renewal
Commercial - 18-20% first year and 15% renewal

How far off are these and what is the general commissions for these type of policies?

Thanks,
Lou

I'm independent in Florida. Direct with most carriers. I must be doing something wrong. With a few exceptions, the agency gets 12-15% new and 10-12 renewal. Commercial is generally 10% across the board.

kent1108 · 06-21-2008, 03:48 PM

Insure in the know, can you please see my post above and provide me with some answers if you get a moment? I tried to PM you, but apparently I need 20 posts before I can.

Thanks!

threlvnfan · 06-25-2008, 10:57 AM

Originally Posted by Steve

You're right. There are many variables in Commercial. BOP's can pay different than CPP's, and Worker's Comp is as low as 4%, and that's a big piece of the AP. BAP's pay less than Personal Auto.

Any information on what Workers' Comp renewals are like?

Steve · 06-25-2008, 11:24 AM

Originally Posted by threlvnfan

Any information on what Workers' Comp renewals are like?

It varies with the company and state, but when I was captive in the P&C world I got 7.5% first year and 5% renewals. I've spoken with people with other companies who got as low as 4% first year, but still got 4% on renewals. I'm sure there are people out there who got a better percentage than I did as well. I'm not sure what the independent P&C people are getting.