Commission Split with Other Indy's

[iiinycboi]

Hi everyone, i have a problem deciding what is fair to me and the indy agent.

I have 2 indy agent who wants to write p&c on the side (they do l&h), they do not have a big book but its an occasional policy here and there.

What is fair to offer them? Would you do 80% of first year and no renewals? 50 first year 50 renewals? 60/40?

I would like to keep this fair to me as well, but i don't want to be offering every agent that wants to do business a deal so whats a reasonable compensation for these guys?
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wanted to add, they just want to use me since i got a few lines and access to the companies. they will be servicing themselves i will do nothing but receive the email and commission and forwarding to them.

should i try to keep this as a referral instead of a producer type thing?

 

[pbbaseball]

unless you have a great system set up to track commissions and renewals, i would try to keep it as simple as possible. if you have to go over 4 companies commission sheets every month, it can get really time consuming.

even though they'll be doing the service work (taking calls, etc), unless they have access to the systems to add/delete vehicles, check on claims, all of the fun service work, all of their calls and questions are going to lead to you doing the service work. whoever is doing the service work should get the renewals in my opinion

 

[Josh]

Hi everyone, i have a problem deciding what is fair to me and the indy agent.

I have 2 indy agent who wants to write p&c on the side (they do l&h), they do not have a big book but its an occasional policy here and there.

What is fair to offer them? Would you do 80% of first year and no renewals? 50 first year 50 renewals? 60/40?

I would like to keep this fair to me as well, but i don't want to be offering every agent that wants to do business a deal so whats a reasonable compensation for these guys?
- - - - - - - - - - - - - - - - - -
wanted to add, they just want to use me since i got a few lines and access to the companies. they will be servicing themselves i will do nothing but receive the email and commission and forwarding to them.

should i try to keep this as a referral instead of a producer type thing?

If it's low volume 50% fyc and no renewals is more than most agents would give out.

 

[nyc2phi]

I think a little bit depends on what they are looking to do. Is it going to be mostly PL or CL ?

I think that 60/40 is fair for either and as an incentive offer to service the policy as well (certs, ID cards, renewal shopping)

 

[CaptiveGuy]

No renewals if you are doing the service work. I'd almost consider a flat fee if they are just sending you a name etc. If they send a good amount of business 50-75% on new business is fair.

 

[iiinycboi]

If it's low volume 50% fyc and no renewals is more than most agents would give out.

I wanted to do 50% fyc no renewals, but i spoke with a few other brokerages and they said this was unfair if they were doing service work. I dont mind doing the service work at all.

I just dont know what the industry standard is for this stuff. Its definitely low volume. Basically they got a book of business but that agency is going out of the p&c game. They are looking for a new brokerage to take over their current book and new clients.

I say they have under 100 clients each (small PL and small bops) so around 200 clients for the both of them. Their new business will probably be more like 1 or 2 per month (they been doing l&h for 10 years for small mom and pop shops just they ask for the p&c insurance coverage here and there)

Then i spoke with my mentor and said 50% fyc only take it or leave it lol.

maybe i will offer 80% fyc for the bor changes and then 50% fyc no renewals i do the service?
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No renewals if you are doing the service work. I'd almost consider a flat fee if they are just sending you a name etc. If they send a good amount of business 50-75% on new business is fair.

their only sending binding business with paperwork completed. not just leads.


oh btw, no autos... i hated the service work so i do joint auto with another brokerage where he does all the service.

 

[Josh]

Then i spoke with my mentor and said 50% fyc only take it or leave it lol.

I like him already.

If they're not going to be sending you volume, there is no reason to mess with them. You're splitting peanuts here.


On a side note, in addition to really enjoying your stories, I really appreciate that you are willing to hear arguments against what you want to do and can change your mind. It's a welcomed change from the folks that come on here expecting folks to just tell them they have a good idea.

 

[iiinycboi]

Hey Josh,

Thank you, i appreciate what you said. We're all students of insurance here, and im very open minded and i know that there is tons to learn from everyone. In the future, i hope i can offer my advice and help when im more successful. I'm surprised no one every gave me any comments about my grammar and failure to capitalize. lol

I'm going to tell them 50% fyc and that's it (ill give them fyc for the bor changes too) I figured i don't really need their book and theyre looking for me to help. Unless their willing to do high production we can renegotiate the terms.

 

[Bertolinoins]

Keep it simple. 50% new, 50% renewal, no contingency or any part of the various commission or rollover deals. I would service it as they don't fully understand what they are getting into and it is your reputation and E&O on the line. Have them live transfer to your CSR.

 

[NCAgent]

I'm also a fan of a 50/50 split. There are two parts to having a client- finding them and servicing them. You need both parts and they are equally important in my opinion. I feel a 50/50 is good and do that with all of my splits unless there are extenuating circumstances (bump them up if there are a LOT of referrals or ongoing relationship, bump the down if the agent owes you a case of beer, etc.)