Declining Commission % Continues

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.
------------------------------
Not sure what you mean by direct appointment through network?

Is a network the same as a cluster? (like the one that Shawn-Walker represents?)

Thanks
 
This is going to be as normal as L&H carriers lowering commission I'm afraid. First it was Travelers a few years ago going to 12% on their new auto product. Then the other day State Auto announced they were going to 14/10 on auto, and similar for home. Then a few days later it was Nationwide.

One after another. Commodization.
 
I'm reading the other thread that goes into more detail from other agents. But its for new business going forward. Before it was 15/15. They offered 10 on some youthful policies.
 
Well it's a 33% cut, but still substantial.

The other thread was about Allied/Nationwide doing the same thing, and someone in there brought up State Auto, Travelers, Safeco, etc. You were participating in that thread, I just didn't see that thread before this one.
 
Encompass is owned by Allstate, hence the commission cuts.

Allstate tries many random programs (and tricks) to increase stock price,
when most of this fails that leave them with only cost cutting, which they
first try to do by cutting commissions.

Once they even tried car warranties to be the financial savior of the company,
and they lost their tails on that program in a hurry.

They cut agents commissions by 10% a few years ago, and dangled a
carrot to the agents with the hope that agents could get some of that
money back.

Now there is talk that they are trying to cut commissions further.
 
And What talk is that? Jeez how much lower can they go?

I bet they will all end up at 8/8. Some Agents frankly don't deserve the high commissions as they build to a point and then just sit on their book like it's an annuity. It's damaging to everyone.

What's clearly happening is they are getting rid of the small home town agent model and filtering business sold online to local large agencies with good customer satisfaction ratings. The large Agents will "take" the pay cutts in returning getting larger bonus opportunities which if they are staffed properly can hit.
 
^ The kicker is the good satisfaction ratings which are entirely engineered to screw the agents. I have ready survey responses where they say 'I love my agent but Allstate screwed me on a claim' and that is used against the agencies if that person gave anything less then an 8. It's complete highway robbery.

You have to understand the life cycle of an agency & as you getting bigger & bigger...the growth %'s become hard & harder to reach. I'm sure you understand those simple metrics & the exponential "kill factor" is when your captive carrier takes HARD rates for a few years.

You're done at that point. The model works for the young ambitious agency owner who's growing a book in the early years. But when similar growth expectations are put on the larger books...it's only a matter of time until horrific rate increases kill you.

It's a very dangerous slope designed to screw you when you're older & trying to run a different operation. Then, they'll use these metrics to essentially force you out & split your book among more young stupid entrepreneurs to follow the same captive fate of doom
 
Back
Top