Captive Agent Commissions

[InsuranceNewCan]

Hey Everyone,

I've been in the industry for a while on the corporate side, but am considering going into sales... I really like the idea of a captive agent (State Farm, Farmers, AmFam, etc.) but want to get some understanding of contract expectations & compensation before I start reaching out to them

Anyone have info about these players and what they pay? It isn't the only factor, but keen to see whereabouts everyone lands.

Thanks

 

[marindependent]

Welcome InsuranceNewCan! I would spend some time reading through previous posts on this forum about some of these captives. Some are much better than others. Many will claim to pay you $XX,XXX only to pay you X in reality. Often they get newbies confused between the difference in Income Vs Profit.

I know nothing about AmFam. In my opinion one of the best place to learn the ropes on the captive agency side might be State Farm. However, that does not necesarily mean its the best place to build a business.

Captive agencies have lots of benefits...and lots of drawbacks. Make sure you fully read through their contracts and speak with at least three successful producers. Ask them what their failure rate is.

 

[Hawaii Agent]

Aloha @InsuranceNewCan! I agree w/ @marindependent in speaking with successful producers; however, I would also speak with new agents too (if they have the ability to carve out time for you). I have extensive knowledge of State Farm and they as a company are great (good training, great products, etc.); however, you do not own your book. Other captives like Allstate and Farmers allow you to own your book. When you leave or are forced out of the company, they will help you to sell your book so you are building an asset.

I think I'm like a lot of others in this forum in that if you have a long-term vision, getting trained by State Farm (through their agency program or just working for an agent) is a great place to start. They seem better equipped than Allstate or Farmers to train. In the long-run most of us enjoy being independents. No manager to listen to, no production goals, multiple solutions to offer, ability to work with larger commercial clients, etc.

Good luck in your search. Keep us informed as you progress!

 

[Ryan Brinton]

Why on earth would you want to be captive?

With less options, lower commissions and minimum production requirements, I can’t imagine why anyone would go that route.

Let’s say down the road your company decides to raise rates by 15% what can you do?
What if they cut commissions by 3%? What if they don’t like your lack of writing some of the products they are pushing you to sell, they can rip your book and put you on the street just like that. Why put yourself in a position where that could happen??

I’ve yet to meet a captive agent that isn’t super jealous of my situation of repping over one dozen different companies, not having to answer to the corporate suits, owning my own book of business with the ability to sell it whenever I want, earning higher commissions and get profit-sharing checks from most of them each year

 

[JB54]

Why on earth would you want to be captive?

With less options, lower commissions and minimum production requirements, I can’t imagine why anyone would go that route.

Let’s say down the road your company decides to raise rates by 15% what can you do?
What if they cut commissions by 3%? What if they don’t like your lack of writing some of the products they are pushing you to sell, they can rip your book and put you on the street just like that. Why put yourself in a position where that could happen??

I’ve yet to meet a captive agent that isn’t super jealous of my situation of repping over one dozen different companies, not having to answer to the corporate suits, owning my own book of business with the ability to sell it whenever I want, earning higher commissions and get profit-sharing checks from most of them each year

Having done both, including owning an IA, I can just say the grass is always greener. Captives are very efficient. You stay in your lane, write the business they can compete for and everything in streamlined. You can be laser focused. Even with rate increases your retention is still pretty good. The company manipulates behaviors with bonus'. They reward new production and punish those milking their existing book. It's business. If you know how to play the game it can be very rewarding and not as stressful. You don't have to create and manage the systems. There are fewer variables. Staff does not need to be as highly educated and compensated because there are fewer moving parts. New employees can be brought up to speed fairly quickly.

IA's have more carrier options and train their clients to re-shop so it creates more work. You also have 6-15 carriers changing rates, pulling out, demanding production, etc. Most commercial IA's end up in a niche which is very similar to a captive...you sell that product until they make a change. CSR's have to be more experienced and educated which corresponds to more pay.

For me, I like the captive side. You can focus 90% on marketing and selling insurance and 10% on running your business. On the IA side as an owner I felt more like it was 50/50. Just meeting with carrier reps when you have 30'ish appointments gets old fast. Bookkeeping takes much more time. Then you have dinners, annual meetings, trips, baseball games, etc. for multiple carriers and they get a offended if you blow it off. You answer to multiple corporate suits rather than one. I will say that when it comes time to sell... owning an IA is a much better situation.

 

[Insurance Girl 11]

Why on earth would you want to be captive?

With less options, lower commissions and minimum production requirements, I can’t imagine why anyone would go that route.

Let’s say down the road your company decides to raise rates by 15% what can you do?
What if they cut commissions by 3%? What if they don’t like your lack of writing some of the products they are pushing you to sell, they can rip your book and put you on the street just like that. Why put yourself in a position where that could happen??

I’ve yet to meet a captive agent that isn’t super jealous of my situation of repping over one dozen different companies, not having to answer to the corporate suits, owning my own book of business with the ability to sell it whenever I want, earning higher commissions and get profit-sharing checks from most of them each year

Hey Ryan,

Are you working with an aggregator? If so would you recommend them?
Did you start as an independent agent or work for someone first?

 

[Markthebroker]

I really like the idea of a captive agent

Most of us prefer to be independent and free. But hey, whatever you're into...