Agency Splits - Condidering Opening Agency

Jan 20, 2008

  1. tr0y
    Offline

    tr0y New Member

    Posts:
    3
    Likes Received:
    0
    Good Morning All -

    I am new to this board and was looking at opening am insurance agency. Before you start laughing, here is may background and you may see why I am looking at this route.

    We currently own multiple independent title insurance agencies in the western united states as well as have mortgage banker licenses and own real estate brokerages.

    Our main background is title insurance we have been doing this for over 20 years.

    Sadly in our area we have had trouble getting the P&C producers to work in a timely fashion and keep up with the standards that we set for our staff and our clients expect. If you are in our area and are outstanding maybe we have just missed working with you and look forward to it .

    So what I am wondering is agency owners out there what type of splits do you see with your underwriters ?

    Are you taking your agency fee then paying the underwriter their cut or do they pay your agency ?

    I know this sounds like very novice questions but if I was getting the service levels that met my standards I would not be considering opening my own agency.

    Thanks
     
    tr0y, Jan 20, 2008
    #1
  2. djs
    Offline

    djs Super Moderator Moderator

    Posts:
    6,676
    Likes Received:
    78
    State:
    California
    Interesting.
    I'm amazed that a local producer won't get you what you need in a timely fashion. In my area (the Western United States, but more specifically, California), agencies will do whatever it takes to keep title companies happy. Heck, if there is enough business, I would even have someone in your office to make sure it happens.

    This leads me to wonder if maybe the breakdown is somewhere else. Closings don't happen overnight. I prefer to work with the mortgage broker, since you can get everything in place before the 11th hour, and things go much smoother. I do occassionally work directly with the title company though, and can still usually meet any reasonable requirements they have.

    To be done right, it takes about 4 hours to bind homeowners coverage. Are you seeing delays beyond this? Is it a rural area (usually takes longer)? Most companies require the agent physically see the house prior to issuing a binder. Some agents will work with the appraisal, some won't. Some agents know neighborhoods pretty well, and know what houses in their area are uninsurable, some neighborhoods are to big, and pictures are needed.

    Since you didn't articulate why the local agents aren't meeting your needs, it's hard to give much advice on this. I'd just be leary that if you've tried several, and they still aren't meeting your needs, maybe you're needs are a bit unrealistic. Perhaps not, but since most agents would love to write this type of business, something just doesn't seem right.

    That said, if you have a producer that works directly for you, sometimes you provide a salary and a small commission, or a larger commission and no salary. It's somewhat rare that a producer working for you would pay you directly, outside of a cut on the commissions. You also have to work out terms on renewals and who owns the book of business. There are no real standards.

    Or perhaps you are talking about splits between the agent and the title company / mortgage broker. If so, this is actually more rare than most people realize. There simply isn't much money to split, and it's hard for an agent to pay their bills with everyone elses hands in their pockets. There are agents that will pay for the referrals, but for some reason in my experience, they tend not to be the better agents. They buy the business, rather than earn the business.

    Dan
     
    djs, Jan 20, 2008
    #2
  3. tr0y
    Offline

    tr0y New Member

    Posts:
    3
    Likes Received:
    0
    Hi Dan -

    Thanks for the answer what you are saying is the norm in our other markets So Cal, Mpls MN, and Pdx, AZ but sadly we are in Las Vegas, not exactly rural. It seems as if when LV was in a boom quality practice did not matter as you were just happy to get a call back. Now with the huge slowdown / downturn people have either just left the business or the calls just go unanswered.

    Amazing huh ?

    I am not really looking to go into the P&C side of this business but when a hazard insurance binder is holding up a closing, making my title and escrow company look bad what else is there to do.

    As for working with the mortgage broker that I agree is where insurance should interact but we are not getting that either.

    These factors and trying to keep some good staff of mine working is why I am looking at this market.

    Regards,
     
    tr0y, Jan 22, 2008
    #3
  4. tr0y
    Offline

    tr0y New Member

    Posts:
    3
    Likes Received:
    0
    The splits I was talking about were not a kickback in any way I was considering opening a P&C agency, and was wondering what and how the general independent agency worked with the underwriters on fees and earned commissions to the agent not the producer.

    This of course is based upon how I look at agent-underwriter relationships. In our business the agent XXX title agency collects the fee for policy and then monthly sends a percentage of that premium to the XXX Title insurance Company the underwriter as a monthly remittance.

    Sorry out with a cold today and the meds are making me a bit dull
     
    tr0y, Jan 22, 2008
    #4
  5. insuragent
    Offline

    insuragent Expert

    Posts:
    65
    Likes Received:
    0
    State:
    North Carolina
    Don't know if are still active on the board, but I would like to contact you ASAP as I am interested in working with you in another way that you can benefit from.
     
  6. dizzy
    Offline

    dizzy Expert

    Posts:
    51
    Likes Received:
    1
    What type of commision structure do most people set up for producers?
     
    dizzy, Aug 3, 2011
    #6
  7. Guest
    Online

    Guest Guest


    Hey dizzy, since this post is over 2 years old, wait by the phone incase the OP calls you to ask you a question.....:no::goofy::swoon:
     
    Guest, Aug 3, 2011
    #7
  8. Sales71
    Offline

    Sales71 Guru

    Posts:
    1,474
    Likes Received:
    2
    State:
    Arizona
    Red that was funny...
     
    Sales71, Aug 3, 2011
    #8
Loading...