Declining Commission % Continues

[AZDave]

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.

And, exactly, what it wrong with that? So the once young ambitious big hitting agent now has 30 years or so with a company and decides to turn it down. His agency is now in the cross hairs due to low production. But yet he is profitable and super high retention.

Why are you picking on the Vet's Todd02?

 

[insurance1822]

He's drunk on Farmer's cool aid wearing Farmer's blinders. Congrats to the manager that recruited him.

 

[Derrick]

The company's that cut commission are the same ones that will get junk sent to them. If I have a guy coming in, that just seems off his rocker, and I get an equally priced quote between an 8/6 company versus a 15/12 company, I'm going to send the junk to the lower commission company.

Low risk, low reward. Low risk because if he goes with said company, said company seems like they are trying to put me out of business any way so why not send them the junk? Low reward because they pay agents like ****, BUT, conversely, I also get to keep my "good" insurance company happy by only signing good business up for them (and bigger bonuses).

Companies, you treat agents like **** and they will return the favor. Reciprocity is a b.

Unfortunately, in a captive system you sorta have to play by the rules of the insurance company because they are the only business you can write with, and they make sure after you realize that they cannot follow through on various promises, that you signed and are locked into a contract.

 

[Gulfman]

^ 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

1822...giving out the gospel (sounds like).

So, let me get this straight; Aggressive agents who grow their business to a point where they sit back and work their B.O.B., are penalized in the end because of their lack of expansion?

Is this phenomena Germain only to franchisees and not to independents?

Thanks 1822



.

 

[todd02]

And, exactly, what it wrong with that? So the once young ambitious big hitting agent now has 30 years or so with a company and decides to turn it down. His agency is now in the cross hairs due to low production. But yet he is profitable and super high retention.

Why are you picking on the Vet's Todd02?

Don't get me wrong in a perfect world I can easily see your point. But from the corporate perspective they didn't develope your position and opportunity to let you sit on your book. With how competitive the industry is the companies can't grow with older agents sitting on their books just dwindling away. They also can't afford to hire anyone with a pulse who writes bad business. I was so happy to hear Farmers stopped hiring agents in Texas.

Grow your agency and income. Makes the world a better place.

 

[insurance1822]

If that's true, it's because they're growing too quick & are having loss ratio issues.

Guess what follows?

 

[SueNami]

If that's true, it's because they're growing too quick & are having loss ratio issues.

Guess what follows?

EXACTLY their problem (allstate) - they want more of the market so they loosen their u/w guidelines, then have the losses that follow, then comes the rate hike.

Bottom line though- they are working for their shareholders, not their agents. If people can use them to make a living and have a good life for themselves and their families- more power to them. I would not choose them though.

Nor Encompass - unfortunately by association.

 

[SueNami]

So long as Encompass is paying me 18% on new business & renewal along w/ absurd bonuses...they're getting my business.

lol. True. I suppose I would too.