Getting into P&C at 50

[Hopes]

I am first year indy. I come from the P&C side. I have an agreement with a P&C agent at a 60/40 split in my favor. I do not service her book but service the new business which comes my way that she cannot write.

Definitely get any agreements in writing. Clarify what "servicing" current clients involves - this can be extremely time consuming and leave little time for your own pursuits.

Be clear and in agreement on who will own the bob for new clients.

If the agency owner is saying you will be under his/her e&o and you are writing/servicing clients on the agency owner's behalf, you will likely need to have a writing code with his/her carriers. How will this affect any existing or future contracts for you? Is the agency owner captive? Will the carriers you write under this agent allow you to have a separate contract and bob with them?

Whose business pursuits will have priority? Yours or theirs?

Also, I started my business, officially, two days before my 50th birthday. It's never too late but it helps that I have a husband who pays the bills so I'm not under any pressure to produce. Message me if you want to chat on the phone.

 

[BoomBoom68]

Thank you for the replies.

I will be splitting the commission 50-50 on both life and property and casualty… I am not a partner… He has three or four other agents that are also on a 50-50 split… The property and casualty commissions he said ranges from 10 to 18 percent, but the life commissions are at 65 percent right now because he has low volume… They are mostly a property and casualty shop… He said that figure changes from the company as our volume goes up… He said when he had a guy and they’re doing 150 Life policies per year the carrier was paying 90 percent and he was on a 50-50 split, as I would be… So I don’t plan on being at 65 percent forever

I will be a 1099 employee and under his ear now… I am not sure if I will have a separate writing number or not we didn’t discuss that… I come from the life sign and assumed that I would have my own writing number like I do now… Always get paid through his agency though and not directly from the carrier

 

[rousemark]

50 too old? Harlan Sanders was 62 when he started Kentucky Fried Chicken. Take it from an old codger, you are just a young'un... At 50 you should be getting your second wind~

 

[62Dodd]

50-50 on the P&C renewals too?

 

[BoomBoom68]

50-50 on the P&C renewals too?

Yes

 

[thomasm]

I'm working a similar deal with a P&C only shop. 50/50 on new and renewal business and includes service. The only difference is I write all the health and life business under my own independent agency.

 

[dorado]

Get the contract in WRITING

 

[Steven Keresztes]

This is one of those low-risk, high upside deals for the agency owner. He will benefit from increased commissions on bundled deals. He will benefit from any back end commission. He will benefit from owning the clients and the residuals. He will benefit from not having to do the legwork and being the one to solicit his clients. He will benefit if/when he sells his book.

4,000 clients? Ask yourself what the actual potential is here? Do the math upfront and make some assumptions based on his current book. Let's say that average auto premium on Auto is $1200 per year and average premium on Home/Renters is $300. Average commission is 12%, so your split is 6%. There are 1,000 potential Auto clients and 1,000 potential Home clients. Your close ratio is 50% of those you contact. After contacting 8 clients per day, 5 days per week, you will have contacted all 2,000 clients. You've now sold 500 Auto Policies and 500 Home/renters policies. You've made $51,000 in a year working your butt off and having a tremendous amount of success....contacting 8 clients a day and closing 4 clients a day.

What would be the residual compensation on your effort? Would you make 50% renewals? What's his retention rate? 85% industry standard? So in year 2 you could see $43,350 in renewal commission. But then what are you going to do for new business.

If these numbers sound plausible and these numbers are worth it to you, then congrats! If not, then you may want to look at starting your own book and capturing much more than 50% commissions.

 

[thomasm]

Check back with me us in a year. We still don't know what we don't know yet!

 

[Warrior]

You could find out which P&C clients own their own business and sell them on that. Think about it this way. With any job, you will have things to do you dont like to do. Servicing is just one way to keep the relationships strong and positively predisposed to you. Your 50. Rergardless of your job, you will be 50 years old. You can make a great living. 1-5 year income is usually $45-$60k. After that is up to you. Referral talks with everyone you sell to. It is hard work, not a get rich quick game. But, if you love people, this is the best flexible career to have. You write your own hours and can not just sit in a desk, but get out in the fresh air. I am 50 years old this year. I have been an Independent Agent owning my own office for 3 years. Best thing I ever did. I am an old Farmers Agent. Going Independent was freeing and allowed me to not be as stressed out about quotas and I have sold more in a shorter amount of time than I ever did with a captive company. More $$ better lifestyle.