Declining Commission % Continues

Sep 6, 2016

  1. URDRWHO
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    Errrr!!! I just got my months commission statement from Producers Insurance Network and I see that the Encompass homeowners commission split is down to 6%. There was a time it was 10%, then it was 8% and now it is 6%.

    I just paid my E&O this week and now I see declining revenues is not a nice thing to see. I pay $500 a year to PIN to be able to do business with their carriers but I'm going to start looking around. Years ago I did some business with Insurance Noodle and think I'll give them a call.

    I'm at that age that retirement is getting closer and closer. After over 30 years in this business I am fairly certain I would not tell anyone to enter the insurance business.
     
    URDRWHO, Sep 6, 2016
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  2. Derrick
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    Have you tried to go direct?
     
    Derrick, Sep 6, 2016
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  3. insurance1822
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    Questions

    Is this only monoline home

    What state

    How big is your book w/ them

    How much new business are you writing w/ them

    What's your loss ratio

    Is this on new business or your renewal book
     
    Last edited: Sep 6, 2016
  4. URDRWHO
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    This is one of the few monoline clients.
    Pennsylvania

    The next answers are in the contract with PIN

    1. Doesn't matter the size of book with with PIN --- unless you get a direct hook-up with them everyone gets the same % (50/50 split).
    2. New business doesn't change a thing with them
    3. Loss ratio is never a consideration between PIN and their sales people

    It is renewal

    Old school thinking is that maybe PIN has a bad loss ratio with Encompass and that effects everyone but I've also seen it with Travelers, etc.

    ----------

    PIN does offer some direct contracts but I never nibbled at it. I liked the work that the PIN office people do for me and was willing to keep the 50/50 split on commissions. The only thing I see that is worse than 6% are WC commissions....on those I get 5% but the size of the WC premiums are big enough that I never took notice.

    Hm...I just started thinking about this one account and although loss ratio doesn't come into play directly with how PIN pays....this account does have a terrible loss ratio and perhaps Encompass placed them with one of their other Encompass subsidiaries and that pays a lower commission.

     
    Last edited: Sep 6, 2016
    URDRWHO, Sep 6, 2016
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  5. Gulfman
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    So what are you saying...that all companies "ARE" cutting commissions? Have you always been with a network?

    Thanks!
     
    Gulfman, Sep 7, 2016
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  6. URDRWHO
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    In the 80's and 90's I wrote through small independent agencies that used independent agents / broker business. Then in my area there was merger mania, the little agencies were bought up by the big agencies and the big agencies had no appetite for outside sales people. So I went with networks.

    From what I have seen and what I have read companies have been lowering commissions. I may look into small regional insurance companies but after a severe winter of ice storms, I had a very good small regional go belly up. That was a long time ago but I saw how being regional meant that the risk may not be spread evenly outside the region.

    I looked at one of those online sites that show what you can earn in any given business. Since 2012 the Insurance salary graph was on a downward trend.

    "Average insurance salaries for job postings nationwide are 5% lower than average salaries for all job postings nationwide."

    This is old news but over the years many companies sent out the same type of news releases.

    "Additionally, commissions paid to agents were decreased for Homeowners policy sales from 15 % to 10%."

    I am so close to full retirement age that I've sharpened my old series 7 teeth and I've started to do some day trading with my retirement account. I've been doing well and with the volatility in this market there is always a good buy somewhere. So I am thinking that I may spend less time on insurance and more time watching my stock basket. If this was 35 years ago I didn't have enough USD in my basket to buy enough equities that the return would be big enough to feed me. A different story today.

     
    Last edited: Sep 7, 2016
    URDRWHO, Sep 7, 2016
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  7. insurance1822
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    Which small regional went belly up?
     
  8. Gulfman
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    Thanks for responding.

    What would you have done differently if you could go back and do it over? Would you have gone direct...or gone with a captive?

    How tough is it to get appointed Directly?

     
    Gulfman, Sep 7, 2016
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  9. URDRWHO
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    Ha ha!! I am having a senior moment!! It was in the 90's, they were a small mutual in the Phila. area. It was a winter that had record ice storms, they had too much exposure on older flat roof's and those flat roof's were destroyed by all the ice. I sent an e-mail to someone that might remember.

    She just e-mailed me the answer ----

    "Northern Mutual Insurance Company................. can't believe I remembered!!"

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    I think that a direct appointment through the network isn't has hard as it is to go alone.

    What would I have done differently? Gone into another business.


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    I just received an answer from the network --- I didn't notice until now because I don't have much mono business and this current one is the first one that popped up.

    "Encompass, back on January 1, 2015 adjusted commissions payable to ******* to 16% for renewal package business and 8% for renewal monoline business (automobile or homeowners). With that said, the maximum your agency is paid is 10% for any package business and 6% for any monoline business. "
     
    URDRWHO, Sep 7, 2016
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  10. thomasm
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    You mentioned Insurance Noodle. Why would they be better to work with?
     
    thomasm, Sep 7, 2016
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