Is Making an Extremely Good Living As a P&C Agent Plausible?

[Tylerk]

When I say good living I mean $180,000+. Well in my opinion that is really good.

I am a P&C agent for Brightway and have only been here for a 3 months and based on the weekly sales report and my Agency Owner's commission report (he shows new agents to show us what we can accomplish with years over time) these people are making a ton of money. But whenever I looked at average compensation of insurance agents its only about $50,000 - $70,000 (based on Google Search).

The Agency Owner at my office has been at Brightway for 8 years and his bi-weekly commission split (New Business, Rewrites, and Renewals) is approximately $10,000 - $12,000 consistently. This is after the Franchise split with Brightway and carrier split and before taxes and software fees etc. So he is earning $240,000 - $288,000 per year before deductions. Isn't that really high for an insurance agent? Is this out of the norm for an agency owner that has been doing this for 8 years?
He only writes about $10,000 in New Business per week but when he shows us the bi-weekly performance calculations, his renewal premiums are at about $30,000 per term (before splits).

Obviously as a new agent, seeing this really excites me. But am I getting false hopes?

The top agent at our agency consistently produces $90,000 per week in new business sales. Two weeks making it $180,000. Even with the lowest commission percentage carrier (10%) that is still $18,000 for the two week term. Brightway takes 15% of new business so that leaves $15,300 for that agent (he is also an agency owner). So in theory this agent would be making approximately $367,200 in new business alone.

Even the bottom of the top 20 sales agent is selling about $12,000 per week. That would equate to $288,000 per year in new business which is $24,480 per year in just new business.

So going back to my question, is all this really possible or is there something that they are not telling new agents?

 

[indienoise]

Sky's the limit as far as income is concerned.
But you're only thinking about gross revenue. You pay your E&O, association dues if you're part of one, AMS/CRM, rater, utilities, lease, GL or BOP on your agency, pay your employees, either wages or commission split, marketing/advertising/purchasing leads, and that cuts it down a good bit. If you've ever been a business owner, that's nothing new to you. If you never have been, you'd be surprised what the cost of doing business can be, no matter what your industry.

Also, that 50-70k figure is an average. Some make considerably less if they're not that good, or part time, some make considerably more.

 

[djs]

There is a lot they are not telling new agents. I am not familiar with Brightway, but this is a pretty standard thing to 'show' the first part of the story, not the rest.

This type of money is very possible and many agents do it. But once they have that check, they have bills to pay, from marketing to employees to rent to E&O and a bunch of other stuff.

Its pretty hard to write $90K per week in new business in P&C. To do this, you have to have a LOT of help, which means you are spending a good portion of that in marketing to obtain the business.

For the most part, in P&C, the first year commission is spent getting the business and you make money on the renewals. Yes, this is a very over generalized statement, but its a very reasonable way to look at it.

Go back and ask to see their Schedule C and it will tell a good story, but not the same one they are painting for you.

$180K+, assuming we are talking net income in your personal checking account, is possible, but it would put you as a top performer pretty much anywhere. $180K gross revenue into the agency isn't that hard to obtain.

Dan

 

[Tylerk]

There is a lot they are not telling new agents. I am not familiar with Brightway, but this is a pretty standard thing to 'show' the first part of the story, not the rest.

This type of money is very possible and many agents do it. But once they have that check, they have bills to pay, from marketing to employees to rent to E&O and a bunch of other stuff.

Its pretty hard to write $90K per week in new business in P&C. To do this, you have to have a LOT of help, which means you are spending a good portion of that in marketing to obtain the business.

For the most part, in P&C, the first year commission is spent getting the business and you make money on the renewals. Yes, this is a very over generalized statement, but its a very reasonable way to look at it.

Go back and ask to see their Schedule C and it will tell a good story, but not the same one they are painting for you.

$180K+, assuming we are talking net income in your personal checking account, is possible, but it would put you as a top performer pretty much anywhere. $180K gross revenue into the agency isn't that hard to obtain.

Dan

Dan,

Thank you for your input. Actually that 90,000 is per rep. However I forgot to add that this particular agent is in a high value area of the state. He was a speaker at a producer meeting awhile back and it was stated that his average homeowners premium was $3500 to $4000. Not sure if he was just blowing hot air up our shorts.

I know 90k is exceptionally difficult to do. I was just amazed by the gross that one single agent can accomplish by himself. Didn't think these numbers were possible at all. There is actually an office nearby mine, this office has 8 total agents and they are producing a total of approximately $300,000 in new premium consistently per month in new business which is amazing to an average agent like myself.

Brightway actually forbids any and all agency owners and agents to do individual marketing. The agency owner pays a flat fee every month and corporate does the marketing. I have an FDD saved somewhere. I'll post back with the exact marketing expense, if I remember correctly it wasn't a huge number.

 

[pcbinsurance]

As Dan stated, "Go back and ask to see their Schedule C".....since they purport to being an open book, they will be happy to show you.....or not.

 

[indienoise]

wait...can't do marketing? I'm hoping that just means can't do traditional advertising (paper, radio, etc.), because that really doesn't matter so much. Hopefully you guys can still buy leads and such.

 

[Gooner]

$90k per week? So that's over $4 million a year? In personal lines? I think I smell something. Or this guy could be one of the greatest agents on the planet. Hell most P&C guys I know are happy with $90k months...not weeks

 

[djs]

Brightway actually forbids any and all agency owners and agents to do individual marketing. The agency owner pays a flat fee every month and corporate does the marketing. I have an FDD saved somewhere. I'll post back with the exact marketing expense, if I remember correctly it wasn't a huge number.

This is likely a terminology issue. What sales agents call marketing, corporations call selling. What corporations call marketing, sales agents call useless fluff (or 'branding').

To most agents, marketing is:
- Direct mail programs
- Telemarketing
- COI marketing (and no, this isn't free)
- More cold calling
- Internet leads
- whatever.....

To write 90K in business a month (much less per 2 weeks), you need to be reaching out to people in a proactive manner. They won't come to you automatically and they won't come to you from a corporate ran marketing program.

There are a lot of expenses in this.

The other question you have to ask is the retention at renewal time. Written business doesn't matter if it all falls off quickly. You need at least an 80% retention at the one year point with 90% being a much better target.

I personally know a lot of agents who actually make over $100K (and a lot more who don't). I only know a handful that make over $150K a year. Funny thing is, I know many who claim to make $500K+ per year, but they use total agency revenue as if it is their income.

Dan

 

[hesse]

90k a week even at a 4000 home policy is over 22 policies a week which means he is writing more than 4 homes a day. don't buy it somebody is telling you fluff. that's almost 5 million a year in new business.

 

[FL P&C Broker]

His acquisition cost per a customer has to be enormous to write $90k/week. Ask to see the w2 or 1099 of his producers.