Indie Newb with Commission % Questions

[iRAISE]

I have been lurking on this board for a while and am considering hiring on as a new agent under an Independent Broker. He has a nice lineup of companys/products. I'll start doing P&C at first and can go into other products later.

My only concern is the commission split. He wants 50% of everything I write (I get 50% of all renewals also). He will cover all office expenses and is negotiable on out of office expenses also (LeTip club, advertising, etc.) He will provide support and mentorship. I will not own my book, but he says hes negotiable on this in the future (need to get more details on this).

It is a straight commission job (no salary/guarantee) and thats fine with me. Most of his p/c products pay 15% so my commish would be 7.5%. Is this enough considering no salary, guarantee, road expenses?

I like this broker and think we are a good fit (another interview later today).

I will be pretty much on the road full time and will pay my own car/gas/road expenses. I'll drop in his local office 1 or 2 times a week to check in, get training, meets ins reps, drop paperwork, etc. I like this arrangement and think it will work great for me.

I receive NO leads from the broker. I'm confident my marketing skills/hard work/sales closer background can make this work without leads.

I will definately try to get a better percentage. What do you PROS suggest I get/ask for?

Anything else I should ask for/get?

I appreciate any ideas/help!

 

[Soaringagent]

Nice! Where are you going to get your leads from?

Do you have good markets?

 

[moeasadi]

I don't think 50/50 is fair w/o salary. I pay my agents 70/30
w/o commission on new and renewals.You decide what fits you best at the moment.Good Luck.

 

[iRAISE]

Soaringagent;165306]Nice! Where are you going to get your leads from?

I'm going to make my own leads. I need to work hard 50-60 hours a week and take a lotta ups. Meet people and prospect all day. Charity work, pitch strangers each mornin at Starbucks, whatever it takes.


a few marketing things I will do:

• Join 2 networking groups (like BNI or Letip)
• Join local Chamber of Commerce
• Pitch everyone I know and all relatives
• Work Facebook, Linkedin, etc
• Attempt to get 3 referrals from every new client
• Build a huge email database to send my quarterly newsletter and prospect to (already have about 1000 realtors to add)
• prospect to all my friends in the car business (17 years in that field), set up a referral program for sales reps.
• Start an insurance blog (I just sold my "poker blog" of 4 years, with 400 posts)
• birthday cards and xmas cards for all client family members (this worked great in car biz).

good markets?

Not sure how to answer this without any experience. I live near Seattle.
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I don't think 50/50 is fair w/o salary. I pay my agents 70/30
w/o commission on new and renewals.You decide what fits you best at the moment.Good Luck.

Thx for your input Moe. 70/30 seems like a fair split to me.

Any advice on generating new business with no company provided leads? What works best for your guys (i'm not afraid to cold call or go door to door). What would you concentrate on the most, if you were me?

 

[warnerins]

iRAISE

If you accept the 50/50 split, I would take 6 of you and you all can start yesterday. This is a complete win for the agent and the agent knows this.

Here is a quick idea for you:

Ask the agent if you can start a "Lost Souls Campaign"

This campaign would be to go after any and all of the quotes that were not sold in the agency in the last year, clients that have left the agency for whatever reason (x-date them for future renewal dates) and complete access to any referrals that were not properly cultivated.

If the agent is too busy to sift through his database, he may welcome the creativity (if not already being done) and will generate a ton of warm calls for you.

 

[iRAISE]

Here is a quick idea for you:

Ask the agent if you can start a "Lost Souls Campaign"

Good idea Tim. I'm not sure i can live with the 50/50 though and you seem to agree. What % do you think would be fair?

Would you please look at my numbers below and let me know what you think?

Lets say I average selling 30 policies per month for the first 3 months @ 800. per policy (mostly car and homeowners). I think this would be a good start based on my interview.

$72,000 X 7.5% = 5400. divided by 3 months = 1800. per month, less 450 for taxes = 1350 per month.

less road expenses per month

cell 50
laptop aircard 60
gas 200
car wear and tear and addl. miles 50 (car is almost new)
total 360.

So i'm making about $1000 a month if I spend nothing on advertising, flyers, promo materials or memberships to organizations (a must IMO without any leads).

50 hours per week (low average) x 4.3 weeks per month= 215 hours

1000. month commish divided by 215 hours = 4.62 and hour. ouchey.

I make $1000 a day with one car big sale (trying to get out of the car business). As a sub-agent I will have to continue to pay my own med/dental for wife and I ($550 a month). The car business dealers pay my med/dent.

This doesnt pencil out as a viable job at 50/50, in my opinion.

Any ideas or problems with my math??

 

[FL P&C Broker]

Tim, out of curiosity, what do you pay your agents?

 

[Calpirin]

Um... also did you think about the E&O and broker bond cost if you were to go out on your own? Office space, equipment, phone lines, fax, parking fee, agency management system, quote rater, so many you name it.

50/50 is not bad for a start. 70/30 for newb? Wow. 70/30 includes office space, parking, etc? What I would do is to plan out how much of annual premium you would bring. Make a grade level of commission split for example, when you bring more business to a certain level, your commission level changes.

Anyhow, I don't know the details. For a start, don't sweat too much about this issue. Regardless who owns the book of business, your client is yours. Client buys a policy because of you not the agency you work for.

Down the line, you will understand what I mean. Good luck.

 

[warnerins]

I tried this without success.....

Hiring Agents on Craigs List

I received some resumes (all wanted a base salary)
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By the way.....

I thought about starting my own Tips Club and never proceeded. I put together this website Ventana Ranch Tips Club

Check out my member list !!??!!??

 

[Cranson]

50/50 isn't a bad split as long as you get renewals at 50/50. Starting out in the P&C Insurance business can be a slow start before you see good monthly income. But if you consistently sell hard for the first 3-5 years the residual income will be great. Just stay focused and positive and in the long run you can make some great money. Also one of the best Agents I know came from the car business. He wrote so much auto insurance from those contacts it was crazy.

Another piece of advice is to learn life/health insurance as soon as possible. Once you get a client in the door and they like you, you need to cross sell every insurance good in your bag.

Good luck!