Rob Lion
Guru
- 653
Not a P&C guy but whats "street" considered for a indy P&C agent?
Found out this morning we are not paid for renewals.
- Thread starter rebekah74
- Start date
- Thread starter
- #12
rebekah74
Expert
- 27
Correct. I discussed all if that with the owner. Thanks!
P&C contracts are still very difficult to get on your own so it must be sub contract out by a cluster.
Depending on the insurance company but the average commission is 15% new business and 15% renewals. Some insurance companies kick in bonuses if quotas are met by the cluster. The cluster shares that bonus to its subcontractors. The cluster will take it's override depending on an agent's contract and buy in.
The higher the upfront buy in, the higher the commissions the agent gets. Max commission that I've seen are 90% from 15% commission. The cluster takes a 10% cut and the agent get the remaining 90%.
Some clusters offer lower buy in or no upfront buy in so their commission split are lower like 60%-80% split to the agent.
Rob Lion
Guru
- 653
Sounds like a headache. Why are P&C contracts hard to come by lol?
- Thread starter
- #15
rebekah74
Expert
- 27
Thanks for the feedback everyone. Greatly appreciated.
A person goes into the P&C industry for Renewals. That is residual income. Those renewals add up quickly. If one does not do it for the renewals, there's no point to be in the P&C industry.
I'm not sure why the contracts are so hard to get. I'm assuming the Insurance failed rate is crazy. 9 out of 10 people failed. My opinion is that insurance companies do not want to deal with that. They rather have successful large agency deal with that by allowing them to subcontract out to new people coming into the industry.
Rob Lion
Guru
- 653
What's the persistentency rate though.
Not necessarily true. Though renewals are a big attraction, prospecting/lead generation is much easier. P&C is a demand product where price drives the market. GEICO knows this all too well.. 15 minutes can save you 15% or more
The real reason P&C contracts are difficult to obtain can be summed up in two words "LOSS RATIO". The larger companies can better control loss ratios with a smaller number of large agencies and/or clusters.
A smaller agency will have a better chance of obtaining direct contracts with smaller regional companies, but be prepared for premium commitments, business plans and a strong profitable track record.
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