Becoming a P&C agent

[livebetter]

I'm considering an insurance career, specifically in P&C. I have an independent agency to affiliate with, but we haven't negotiated percentages yet. The agency is run by people I've known and trusted for a long time. They're very enthusiastic about the idea of me becoming an agent, but I originally approached them with the idea.

I was interested in insurance because...

I still have kids in school, and while I don't mind working hard, I like to be available to attend their events and occasionally a field trip or school party so I want a job that offers flexibility.

I live in the Midwest and I'm very well connected in my city. I want a career that capitalizes on my connections and allows me to benefit from my love of networking.

I am attracted to a career that benefits from good client relationships. I prefer long-term relationship sales to single close sales.

I understand that maintaining clients isn't always a given, but I like the idea of generating some residual income as the business grows.

***********************

The negatives I see with insurance are...

I'm familiar with sales. I know about the rejection and about the dedication and persistence necessary. I can handle that part.

I know that it will take time to build business and that it's likely I won't make rock star income in the first few years. I also know that there's less money in P&C than L&H. I'm starting with P&C, including commercial, and possibly moving to L&H later. I want to get really good at home, auto, commercial before tackling L&H... if I ever do.

Competition is everywhere, although I realize this is true in any profitable industry. I've heard that commercial is especially competitive in my area.



*********************************

I would love to hear any advice or words of wisdom from those in the industry. I'm especially interested in those who focus on P&C. If you've entered the industry in the last six or seven years, would you mind sharing your income range for the first few years... or even up to the present? With the wide range of insurance products available, it's difficult to find much research on early income ranges for P&C only agents.

I'm also interested in anyone who focuses on commercial insurance. I realize this is a broad area. Regardless of whether you handle all types of business insurance or you focus on a niche, I would love your insight related to commercial insurance.

Thanks in advance for taking the time to offer your ideas and advice.

 

[patch36]

Not much money in P&C, especially as a sub-agent. I did P&C as a career agent for over a year, my first year. I have not done any P&C since, I give it to a friend who I went to career school with. I started L&H only after my first year as a P&C agent. My first year as a hard working P&C agent I didn't make anything after expenses. My next years as L&H I have never made less than 6 figures.

Of course the agency is happy to have you as a producer. If you fail, they still have your policies, and if you succeed, they still have your policies.

What city are you near in the Midwest?

 

[livebetter]

Chuck-

Thanks for the insight. That's a pretty dramatic difference on P&C vs L&H. Thanks for sharing. It always helps getting real numbers from real people, rather than just averages or the "it depends on you" answer.

Have you ever done anything with commercial insurance? I do know lots of business owners, although I hear it's always a fight for commercial policies.

I'm in Kansas City.

 

[djs]

The other side of the coin....

I started in health, but switched to P&C. I make FAR more money in P&C than in health. I guess it does depend on the individual, and as importantly, the area you are in.

In full disclosure, I do both P&C and health currently, find P&C a far easier sale and better overall $$$. If you look policy to policy, a single health policy will almost always pay more than a single P&C policy, but then, don't write single P&C policies in a household, it's a waste of time.

Writing commercial is a different ballgame. Good commercial agents say it is extremely easy, but you have to know what markets you have solid rates and underwriting in, and focus on those markets. You can make some great money in commercial insurance, but it does take time to develop.

Oh yeah, the thing about P&C insurance is it is far more about the residual income than new business income. With health, residuals add up, but it never amounts to the same $$$ value.

Dan

 

[livebetter]

Thanks, Dan. It's a little more encouraging to hear your experience with P&C. I'm just more attracted to P&C (and possibly commercial) than L&H, although health insurance is more appealing to me than life.

I've heard over and over again that there's no money in P&C, and you'll never make much of a living without selling health and life. It's good to hear some additional feedback.

I appreciate the input on business insurance, too. I haven't had the chance to speak with many commercial agents in my area. Any other thoughts or ideas on the commercial side would be appreciated.

 

[motoxxx]

I have heard that the P&C policies take more time to service and that is from my friends that do P&C. I do mostly Life and Health but have looked at adding P&C to sell to my substantial book of business.

 

[warrenins]

Commercial P&C is a different animal. A few things to consider are
1. Markets- you have to have the markets to write the business particualrly in a soft market. You can specialize(niche) in the industries where your companies are competitive as a way to put some business on the books.
2. Training. The agency you work with needs to devote time to your training and learning. There is a lot to learn and you can't get in front of a business owner and not know what you are talking about. OJT is the best way but the agency has to be commited to helping you.
3. Customer Service- Make sure the agency has a staff in place. It is easy to sell and service in the beginning because you don't have that many clients but once you start writing more business it is virtuely imposibble to do both
4. Contract- Make sure your producer agreement with the agency is spelled out very clearly. ie..if you leave the agency what are your rights to the book, what would you have to pay to buy thiose rights etc...
5. Commision Splits- Check the averages in your area to make sure you get a fair deal. In Georgia:
50/50- you better sign up yesterday, almost impossible to find
60/40- pretty darn good this day and
time
70/30- becoming more prevelant
75/25- There are actually some agencies moving to this. I think it is highway robbery unless they are sharing bonus money with you. Yeah right LOL LOL
You are the second number by the way haha

Just some food for thought.

 

[saieddie]

I find patch's claims to be pretty dubious. Life and health is a much harder sale and longer underwriting. The way renewals are paid for these lines of business, the p/c agent will almost always earn more money over the long haul.

 

[motoxxx]

In my home state of WA there is no underwriting process so the applications get processed very quickly. Our insurance commie has mandated that all insurance companies use the exact same health scoring system and same health questionnaire. If someone accumulates more than 300 points on an app, they are deemed as uninsureable. The problem with this (and there are many!) is that the companies that are left in WA do not pay advances on policies sold so it makes it hard to make a living just doing health until you have a rather large book of business.

One of the companies I work with I have over 400 clients just with one company and it pays pretty well now. But it was really a grind to get it to this point.

I thought about just adding the P&C to expand on this now since our new Universal Health Care plan for WA state was just trash canned, I may just stick with life and health.

 

[1manshow]

Also a P & C fan. Started in group health and life in 1986, sold my book of health business in 1990ish and haven't looked back. warrenins is spot on with the commercial info.
I can remember having a goal of 100k in comm in the early years and I hit it in year 4 or 5...unfortunately my strong point was sales not bookkeeping and the 100k after expenses wasn't what I had hoped for. The second 100 was much easier and the third was the most fun. I try to thank God everyday for the chance to be in this business.