Agents Making Little to No Money... How / Why?

[BrokeLoser]

I've been lurking here for a while and have read many posts about "starving" agents making "no" money. I'm recently licensed in CA - P&C / L&H. I haven't decided on my exact direction quite yet....but one of my best friends that got licensed and got me thinking about the insurance biz just finished his 21st day working out of a Farmers district office as a 'reserve agent'....he has averaged one policy per day since he actually started working. His business overhead totals $450 per month. He says its quite easier than he expected it be....quite the contrary to what it seems most have to say here. I've read here that 'breaking even' your first year is what most can expect. Anyhow, my point is; like educational degrees and 'licensed required' types of bussinesses are most getting licensed and thinking that that means because you're licensed your bank account automatically fills up with cash? Are people working or just 'waiting for the phone to ring?' Some things I've read here are really starting to get in my head and I'm just trying to get a handle on it all. I'm certainly not planning on going into business to 'break even'.

 

[xrac]

.......I'm certainly not planning on going into business to 'break even'.

That is the right attitude. If you feel like that why have you chosen brokeloser as a screen name? If that is he way you feel about yourself the first order of business is to change that.

 

[BrokeLoser]

That is the right attitude. If you feel like that why have you chosen brokeloser as a screen name? If that is he way you feel about yourself the first order of business is to change that.

That's sort of an inside joke; it's intended to be of facetious nature. My friends always refer to me as the "successful one" and I always say; "Nah, I'm just a BrokeLoser."

 

[xrac]

That's sort of an inside joke; it's intended to be of facetious nature. My friends always refer to me as the "successful one" and I always say; "Nah, I'm just a BrokeLoser."

Good to know that, you had me worried. Still, it may be good to remove that terminology from your vocabulary.

 

[somarco]

You can go broke in a hurry, make a lot of money in a short time or make it over the long haul.

It's all up to you.

 

[BrokeLoser]

You can go broke in a hurry, make a lot of money in a short time or make it over the long haul.

It's all up to you.

Some here make it sound that nobody can possibly make any money in their first year. That's a bit concerning to me. My buddy sits in an office with 11 other agents, he says while he's sitting there pounding the phone setting up deals the others are sitting there looking around the office at each other shifting paperwork back and fourth across their desks and checking their email and the fax machine 100 times a day. That seems to be the case in any sales environment. You have the pro's that are willing to work for what they want and are willing to go get it and the others that just expect what they want and wait for 'it' to come to them; it usually doesn't. I guess you can never deny the ole' 80 / 20 rule. I'm not trying to be insulting towards anyone, I'm just trying to figure things out and enter the biz with a positive proactive mindset.

 

[djs]

just finished his 21st day working out of a Farmers district office as a 'reserve agent'....he has averaged one policy per day since he actually started working. His business overhead totals $450 per month.

Don't misinterpret what a lot of people do versus what is possible. A lot of people start in the insurance profession thinking they will make a lot of money, and simply forget they have to work a solid work week to make this happen. If you don't work a full 40-60 hours a week when you get started, you will be doing good to break even.

On the flip side, people come in and make over a $100K their first year. This is not the norm either, but very possible, if someone is a real go getter.

Back to your point.... and I don't want to bust any bubbles, your friend is doing great, and it sounds like he will do well, but I did want to give some perspective.

- P&C is an easy sale. I know, I sell P&C. It's much easier than health, and easier than life. Writing 20 to 30 policies a month is very realistic. To write more long term will require some help, but it's very doable.
- The first 30 policies in P&C are the easiest. These are usually to people you know, or at least have very little separation. It then gets a bit tougher as you figure out how to market, then it gets easy again to find new policies. You do have to have marketing strategy though.
- As you build a book of P&C business, the service on existing customers can become overwhelming, which slows down new sales. I've seen agents get stuck here, the trick is to have someone else deal with 80% of the service work, you, as the agent, focus on selling.
- His business overhead will go up. I assume the $450 is some form of office rent. He'll soon have E&O to pay, marketing expenses, and a few other expenses to deal with. It doesn't take much for overhead, and in fact the key to success is investing in your business wisely and keeping your overhead low.

Good luck! Jump in!

Dan

 

[BrokeLoser]

Back to your point.... and I don't want to bust any bubbles, your friend is doing great, and it sounds like he will do well, but I did want to give some perspective.

- P&C is an easy sale. I know, I sell P&C. It's much easier than health, and easier than life. Writing 20 to 30 policies a month is very realistic. To write more long term will require some help, but it's very doable.
- The first 30 policies in P&C are the easiest. These are usually to people you know, or at least have very little separation. It then gets a bit tougher as you figure out how to market, then it gets easy again to find new policies. You do have to have marketing strategy though.
- As you build a book of P&C business, the service on existing customers can become overwhelming, which slows down new sales. I've seen agents get stuck here, the trick is to have someone else deal with 80% of the service work, you, as the agent, focus on selling.
- His business overhead will go up. I assume the $450 is some form of office rent. He'll soon have E&O to pay, marketing expenses, and a few other expenses to deal with. It doesn't take much for overhead, and in fact the key to success is investing in your business wisely and keeping your overhead low.

Good luck! Jump in!

Dan

Great information; thanks for that.
For now my buddy has refused to write policies to anyone he knows. I asked him about this, he said the DM asked him to first create and work his "warm" list but he said he didn't want to do that until he was sure he would remain with Farmers. Pretty bold of him to tell the DM that after signing a reserve agent agreement.

 

[jamesflou]

If your friend is writing on average a policy a day he or someone is making some money. That's about what you would need as a captive agent to make decent money since you are sharing half or more of your commission. I know agents who made anywhere from 50-100+ thousand there first year. It depends on what you do. If you stay in front of people as much as possible it can be done. If you make a few good sales and then play golf the rest of the week it probably want happen. If you are independent then you need to average a little over $2000 annualized each week to make six figures. You will have a few lapses, non takers, and declined cases. Go for it!

 

[patch36]

Great information; thanks for that.
For now my buddy has refused to write policies to anyone he knows. I asked him about this, he said the DM asked him to first create and work his "warm" list but he said he didn't want to do that until he was sure he would remain with Farmers. Pretty bold of him to tell the DM that after signing a reserve agent agreement.

Wellll. a policy a day as a reserve agent might gross him a whopping $20-$60 on an auto. I really doubt he is either doing it or can maintain it, but they may be handing him walk ins and serving up business. DM's will tell you what you want to hear and go along with about anything when you are a reserve agent as they are setting the stage and the hook to make you a career agent.

Good luck, but realize if you think the amount of money your buddy is 'making' is acceptable, you will be an average agent pulling in $24k a year and will fail. I hit all the numbers, sold more than enough life to qualify for the awards and after the advances and commission matches I still owed them money after a 'successful' year.

Have him run a quote for you and then get quotes from the major competitors, including Geico and Progressive. Farmers rates suck almost everywhere and you will be selling what is best for the agent, not the client.