How to set up a P&C Agency or Work Under an Agency Correctly

Dec 20, 2018

  1. insurance404
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    insurance404 Super Genius

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    I have a very successful health insurance agency with over 1,100 clients. I get about 2 people per week asking if we do Auto and Homeowners (thats without us asking them for the business). We have a really strong relationship and customer service structure.

    For the past year I wanted to get into P&C (Auto, Home and Small Business). I did commercial insurance for a year about 12 years ago, yet wanted to get back into it. Our only busy time is Nov 1st to Dec 15th. Super slow the rest of the year.

    1. Looking to find an agency to work under, we own the book of business (if possible) and get a split. What would you think would be a good Split? We do all the work...

    2. Any ideas on Best Practices on how to proceed?

    Thanks!
     
  2. insurance404
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    insurance404 Super Genius

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    Yes I have read many of the other posts.

    What is a typical commission split you would give agents? First year and renewal?

    Mainly looking for an agency near Seattle to buy, merge with, or most likely work under with my employees for that segment of business. As long as something comes together I can be okay with whatever structure.
     
  3. benneaf
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    benneaf Expert

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    I am kind of in your boat as well, but my book is less than half your size on the health side. It would be higher, but several carriers quite paying commission in TN. I've partially rebuilt my income with Medicare sales the last few years, but have now secured my P & C license and am trying to figure out how to proceed. I joined Superior Access, but so far every commercial quote has been non-competitive. On the Personal side all I have quoted is my own home and auto and it was with Travelers, which a friend at Travelers says their rates in TN are not competitive at all and there are much better rates out there.

    I'm trying to get some better appointments to carriers, but if I can't the only option is to partner with someone. From what I have put together most want 50% of commission with no vesting..ever. That would suck.

    I think in 1950 maybe that made more sense, but it doesn't to me today. I think a 65/35 split with a 2 year vest would be fair. I know from reading other posts it depends on what all the broker is doing (paying for E & O, continuing Ed, reimbursement for licensing, training, and possibly marketing).

    Any input is appreciated here. Thank you
     
    benneaf, Dec 29, 2018
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  4. Mike007
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    Mike007 Expert

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    You can usually find someone local in your area willing to work out a deal with you. Every agency owner is different, so there is no telling what the contract is going to be. The minimum contract is usually 50/50 split.

    You can also find clusters that are willing to deal with you as well. Try to find a cluster that writes business in your states and contact them what kind of options they have available. Some clusters will allow you a 70/30 split. Some will do a 80/20 split. Some have tiers depending on the fees you are willing to pay up front. The higher the split that favors you, the more the buy in fee is.

    Whatever you do, just make sure you have binding authority and a contract stating that it is your book of business.
     
    Mike007, Jan 4, 2019
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  5. Dreamiekid
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    Dreamiekid Expert

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    Look for non standard companies that would appoint you. That is the best route. If you start selling a lot, then find the A Rated companies.
     
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