Average First Year Commissions in P&C

[DLY311]

Hey guys,

I am looking into working for an agency that will allow me to write P&C as well as what I already do (Life, Annuities, DI,CI and Health). I wanted to know what are the average first year commissions in this kind of environment? I know renewals are the most important part but other than that and my base what are realistic first year commotions on an auto policy as well as homeowners for example? Is it usually as earned or is there some advance. Please give specific answers if you could. Thanks in advance.

 

[VaDwayne]

Hey guys,

I am looking into working for an agency that will allow me to write P&C as well as what I already do (Life, Annuities, DI,CI and Health). I wanted to know what are the average first year commissions in this kind of environment? I know renewals are the most important part but other than that and my base what are realistic first year commotions on an auto policy as well as homeowners for example? Is it usually as earned or is there some advance. Please give specific answers if you could. Thanks in advance.

That's funny, I hear our personal lines people on the phone and it sounds like a lot of commotion....

Actually I did basically the same thing that you are wanting to do, but I was able to negotiate a nice salary from the agency I now represent.

Here's the problem I see, if you start doing P&C, that is going to take away from your time and ability to sell your other products, and vica versa. The two are tough to do, at least that is what I found.

 

[FL P&C Broker]

It is anywhere form 10% to 15% depending on the products and carrier. Then you have to figure in your split.

 

[edbergstrom]

If you try hard, and i mean really hard you will do good to make 35,000 your first year....and that is if you are a rockstar. Also, this is working on no salary, 100% commission. You will have to close at least 15 families a month with home and auto with an average annual premium of @ $2000 for the home and auto. If your carrier pays 15% and you get 75%, which is what i pay, you as an agent make 11.25%. $2000 X 11.25% = $225.00 per deal. close 15 families and make $3375.00 (15 X $225 = $3375)
If you don't have an assistant, it may sound easy, but i can guarantee you that it is not easy to close 15 families a month your first year with no assistant. But, that is my experience, and i have never bought a single lead. It is all networking, referral and warm market.

 

[1manshow]

good advice from the trenches right there...it's hard work

 

[sevenbravo]

Hi Guys, Thanks for the advice. I am curious to know that the bottleneck in getting more P&C policies closed in a month. Fifteen policies a month, if a person is working 50 hours a week, means that each policy takes 13-14 hours to complete. Why does this take so long? If I have a pile of leads to work each day is it the closing of the sale that takes so long or is it the processing and paperwork.
I know there are some agent relationships that depend on a 3rd party individual to actually bind the insurance and I realize that that setup takes more time, but if you can bind the insurance yourself does it still take this much time?

Thanks for your advice. I am very new an d naive to P&C and sadly, like most I would assume, it looks easier from the outside than what it is in real life.

 

[BTFuzz]

Hi Guys, Thanks for the advice. I am curious to know that the bottleneck in getting more P&C policies closed in a month. Fifteen policies a month, if a person is working 50 hours a week, means that each policy takes 13-14 hours to complete. Why does this take so long? If I have a pile of leads to work each day is it the closing of the sale that takes so long or is it the processing and paperwork.
I know there are some agent relationships that depend on a 3rd party individual to actually bind the insurance and I realize that that setup takes more time, but if you can bind the insurance yourself does it still take this much time?

Thanks for your advice. I am very new an d naive to P&C and sadly, like most I would assume, it looks easier from the outside than what it is in real life.

The policies don't take that long....I think he is trying to tell you that you'll need to close that many families to be successful at making average income. You're not gonna close 100% of the proposal's so you gotta figure a lot of time spent on those you do not get....closing the sale is the hard part. Writing up and processing the policies is easy.

 

[djs]

He did not say 15 policies, he said 15 households, 3 policies per household, total of 45 policies.

My experience is you can only run at this pace for a certain amount of time before you burn out, hence his comment about having an assistant.

Quoting, selling, writing, binding the applications, figure a total of 2 hours per household. Finding a prospect to sell them to? Figure 8 hours per household, 1 per day. Face it, you have to call that pile of leads, you have to set an appointment with them. You have to complete the fact finders. With P&C, you have to do an inspection of what you are binding. It all takes time.

In general, the first year with P&C is very difficult. After that, you start building up renewals to help pay the bills. P&C is all about the renewals, much more so than first year sales.

 

[FL P&C Broker]

I do everything over the phone and still get burnt out sometimes trying write 40+ policies a month.

 

[edbergstrom]

exactly what DJS said. I am not saying 15 policies. That would be easy. I am saying 15 households... And you do have to kill it every week to maintain that production. The key is be consistent with what your doing if its working, follow up with the leads if that is what your doing, and if your sign says your open from 9-6, be open from 9-6. It's putting a plan together, executing the plan, and being consistent. The thing many agents do not do is execute the plan, let alone executing the plan consistently. So develope a plan on how to do 15 households a month, execute the plan, and be consistent and follow up. If you say your going to call someone at 1pm on 4-19-2011, put it in your outlook calendar or google calendar and be sure to call that person at that time etc etc etc. You can do it. It s just takes consistent hard work every day, every week. But it is worth it.