I'm Not Sure this is Fair..

[itsjustrachel]

I'm confused..is this good news for me? Below is a copy & pasted email from the broker I am working for in response to my asking him to help me with a goal to make at least $2,000 per month.

Here are your goals Rachel. To get to the $500 per week you will have to sell $4,000 in premium per week. Good news.......this is very realistic.
Average auto premium should be about $1,000 per year and average home premium should be about $800 per year. So you should shoot for 3 autos & 2 homes per week. With an average commission of 13% that should put you over $500 per week.

Let me know what you think.

Where is his cut if I'm getting 13%?

 

[VolAgent]

I'm confused..is this good news for me? Below is a copy & pasted email from the broker I am working for in response to my asking him to help me with a goal to make at least $2,000 per month.

Here are your goals Rachel. To get to the $500 per week you will have to sell $4,000 in premium per week. Good news.......this is very realistic.
Average auto premium should be about $1,000 per year and average home premium should be about $800 per year. So you should shoot for 3 autos & 2 homes per week. With an average commission of 13% that should put you over $500 per week.

Let me know what you think.

Where is his cut if I'm getting 13%?

Those numbers don't make sense. $4,000 in premium at 13% is $520. You said you are getting 25% of new business, so you should be getting $130 in this example. I can't believe he is getting 52% on home and auto. If he is, I'd find some way to survive the first year, 26% renewal commission on home and auto would be insane!

Using his 13% commission and then giving you 25% of new business, you need about $15,400 in premium to net $500 a week.

 

[Norwayguy]

Why are you asking us....There is obviously some confusion over the commission. Email him back and thank him but say your really confused is your commission 13% or is it 25% of 13%? To reach the numbers you discussed.

 

[itsjustrachel]

Those numbers don't make sense. $4,000 in premium at 13% is $520. You said you are getting 25% of new business, so you should be getting $130 in this example. I can't believe he is getting 52% on home and auto. If he is, I'd find some way to survive the first year, 26% renewal commission on home and auto would be insane!

Using his 13% commission and then giving you 25% of new business, you need about $15,400 in premium to net $500 a week.

Yeah, I'm not sure what's going on but this is just an email..I'm waiting on that contract to see exactly what I will be getting because this is completely different from what he told me a few weeks ago. Thanks for your help.
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Why are you asking us....There is obviously some confusion over the commission. Email him back and thank him but say your really confused is your commission 13% or is it 25% of 13%? To reach the numbers you discussed.

You're right..I apologize for breaking into your house and forcing you to reply to this thread. I was under the assumption that this was a great place to ask questions. I was initialy trying to find out what a fair split would be since I am new to the industry. The rest of my communication on this thread has been with people who offered help and clarity. Please feel free to move along.

 

[Norwayguy]

I was just saying no one on here knows exactly what this broker is going to pay you. We all know including you that his email does not match what you were told previously. I wish you the best with this and hope you get those numbers in writing.

 

[Tucker444]

I must have missed the post that you decided to accept the job.

You have started without signing the contract and unless I missed it you haven't even seen a contract.

Clearly there is confusion already on what the numbers are.

On one post you indicated you didn't know what the agency commission was from the Carrier.

If you are getting 25% of that commission then you absolutely need to know what the Carrier is paying to the agency.

From experience...you can make more than $500 a week working part time delivering pizzas.

 

[BigIVU]

If anything, those numbers are usually reversed. It is usually much more difficult to land a new account than retain existing business and more costly. Is this commercial or personal lines? Check out Agency Consulting Group, Inc. - Consultants to the Insurance Agency Industry - Agency Benchmarking, Agency Valuation, Agency Analysis, Agency Automation, Agency Acquisition, Agency Sales, Agency Mergers, Expert Witness, Incentive Compensation Program for some good articles.

 

[itsjustrachel]

Thank you, I'll check it out.

 

[insurance1822]

Our producers get no salary, 100% first year commission & guranteed 25% of the total renewal commssion paid to the agency. Renewal commission jumps to 30% of the total renewal commisssion upon writing 30 policies per month & 50% of the renewal commissions upon writing 40 policies per month (rolling 3 month average) No leads..they're on their own.

We're mainly a personal lines broker...w/ access to the best companies in our state.

We cover E&O, office space, printer, phones, computer etc & they have access to all our referral sources.

Starting out is tough...but you know that already.

 

[MikeM.]

OP,

I feel for you. I'm in the same situation...trying to find a contract worth doing business with is just tough, especially in the P&C. I wish getting contracts in P&C was as easy as Life Insurance. Just wanted to drop in and wish you the best of luck and I hope you find what you are looking for.