Considering Insurance Sales, Leaving Mortgages

cyberskeet

New Member
7
I am looking to get out of the mortgage origination business and I'm either looking at being in insurance sales or investments/being a broker.

I really love analyzing stocks and bonds but I have to admit I think I might be able to clean up pretty fast at an insurance company. I met a guy this weekend that works at Liberty Mutual and he gets most of his business from referrals from one (albeit successful and busy) Loan Officer and he does pretty well financially.

Well I got to thinking, if he can do so well with one main referral partner, imagine what I could do with all of my good friends/peers in the mortgage business? I literally have more people than I could even possibly contact without help. And that is just people I know would say yes. I also know several SVP and higher executives and it sounds like I might be able to set up ABA's with them were we pay for joint marketing, and get referrals for all of their purchase business from the whole team or division.

My question is this, as far as you guys/gals know, what type of insurance firm should I be working with? Are there any that would pay higher commissions on home onwer's insurance? I also realize its all about cross selling and every HOI policy I would sell I would also get them to sign a life insurance policy for the amount of the mortgage and probably mix in auto insurance as well. Once you gain their trust I understand its an easy sale.

So I am looking at Liberty Mutual but also Farmers is calling me as well. What do you guys think about my situation considering all of the potential home owners insurance policys?

I also have a friend who works at Wortham insurance here in texas, largest independant broker in the state. Would I be getting more commission at smaller companies than at the larger companies. That's really the way it is in mortgages. The larger companies share less of the pie because of all the extra overhead of having a large nationwide firm.

Any help would be great!
 
I would have no issue jumping into insurance if I had that kind of network. I would push homeowners, auto, and life for mortgage protection. The hardest part in insurance is finding people to sell to. If you already have that solved, the sky is the limit.

Next is picking the right company/agency to go with. I'm not a fan of Farmers but that just me, there are way too many Farmers agent in my area and their prices are not competitive in my area the last time I checked.

Going independent is the way to go but finding a cluster to contract with as a brand new agent with no book....that's the tough part. I'm currently at this stage. Go to the P&C section and read up on clusters and try to find one that operates in your state.
 
Thanks for the info guys. What exactly does it mean to go "independent" in insurance? In theory have world that would mean two things, get your own brokers license which requires quite a bit of reserve money in the bank or E&O coverage, or it could mean to some people starting what is called a "net branch" which is basically a franchise.

Being able to have good rates is extremely important but also at the same time so is getting the best commission rates. Those two things might work against each other though as they do in the mortgage business, or at least used to before the frank Dodd act reformed our compensation.

In insurance do you have the ability to charge a higher premium to make what we called in the mortgage business "overage". Or is the commission always a fixed number and just a percentage of the premium?

In mortgages lets say par rate pays 2% commission and the loan is 200k well that's easy it's a 4k commission. But I'm the good ole days you could charge a slightly higher rate and even if it was just .125 or .25 higher on the rate, the commission would be magnified way beyond that because it was based on the negative points associated with that higher rate and not the rate. So charging .25 on the rate above par could make you an extra 1% on top of your standard 2%. Hypothetical numbers. Most lo's don't make 2 points these days but some do if they don't care about the customer. Purchase clients don't shop you as hard on the rate so people that focus on purchase loans can make up to 4 points on a deal.

All frank Dodd LO comp reform did was fix the amount a LO makes as commission, it can no longer vary from deal to deal or based on the loan type.

Are there any practices like this in insurance where you can make a little extra on a policy? I have a feeling there is probably not or at least it's not in your best interest because its easy for them to renig and go with someone else and also the money is truly in cross selling and getting their other policies. I guess you really want a client for life in insurance because of residuals which don't exist in mortgages (yet).

I know one large and growing mortgage firm that wants to start servicing all their loans and give the loan officer a piece of the monthly servicing fee. Should be interesting.
 
You can get good commission upfront in Life Insurance but you won't earn much in Property and Casualty Insurance until you build a large book.

Read this about starting an insurance agency selling Property and Casualty insurance. Great read. I wish I knew about this information years ago. After reading this and you are still interested, go and do your research in the P&C section about clusters or franchise you can get contracts with.:

http://www.insurance-forums.net/for...guide-p-c-new-agents-new-agencies-t46957.html

As for Life Insurance contracts, they are much easier to get. There are plenty of IMO you can get contracts from. Some members in this forums can give you contracts as well.

You'll need to do a 52 hour course for Life & Health Insurance license and another 52 hour course for Property and Casualty license. Pass the state tests and you are good to go after all fees and backgrounds are taken care of.
 
Thanks for the info guys. What exactly does it mean to go "independent" in insurance? In theory have world that would mean two things, get your own brokers license which requires quite a bit of reserve money in the bank or E&O coverage, or it could mean to some people starting what is called a "net branch" which is basically a franchise.

Being able to have good rates is extremely important but also at the same time so is getting the best commission rates. Those two things might work against each other though as they do in the mortgage business, or at least used to before the frank Dodd act reformed our compensation.

In insurance do you have the ability to charge a higher premium to make what we called in the mortgage business "overage". Or is the commission always a fixed number and just a percentage of the premium?

In mortgages lets say par rate pays 2% commission and the loan is 200k well that's easy it's a 4k commission. But I'm the good ole days you could charge a slightly higher rate and even if it was just .125 or .25 higher on the rate, the commission would be magnified way beyond that because it was based on the negative points associated with that higher rate and not the rate. So charging .25 on the rate above par could make you an extra 1% on top of your standard 2%. Hypothetical numbers. Most lo's don't make 2 points these days but some do if they don't care about the customer. Purchase clients don't shop you as hard on the rate so people that focus on purchase loans can make up to 4 points on a deal.

All frank Dodd LO comp reform did was fix the amount a LO makes as commission, it can no longer vary from deal to deal or based on the loan type.

Are there any practices like this in insurance where you can make a little extra on a policy? I have a feeling there is probably not or at least it's not in your best interest because its easy for them to renig and go with someone else and also the money is truly in cross selling and getting their other policies. I guess you really want a client for life in insurance because of residuals which don't exist in mortgages (yet).

I know one large and growing mortgage firm that wants to start servicing all their loans and give the loan officer a piece of the monthly servicing fee. Should be interesting.


No, there is no such think as overage. All rates are filed at the state level. It doesn't matter if you are the biggest producer with a company for example ING, or do one policy a month. The customer will pay the same payment. Now the more you do with a particular company the higher commission rate they will pay you.

I
 
Makes sense and sounds good. Higher volume equals higher commission rates.


No, there is no such think as overage. All rates are filed at the state level. It doesn't matter if you are the biggest producer with a company for example ING, or do one policy a month. The customer will pay the same payment. Now the more you do with a particular company the higher commission rate they will pay you.

I
 
I work for LM. Reps in TX kill it with us. I'm on the easy coast, so I'm not sure exactly what the reason is, but I wish I was in the TX market with LM.
 
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