New Agent at Independent Agency Question

[newagent6372]

I have worked clerical at a small independent agency for the last year. The owner is the sole agent we have.

I really enjoy the insurance business, so I went and have gotten licensed. The owner still wants me to work for him in his office, still doing some clerical but also selling policies myself for commission.

He wants to keep 75% of my commissions to do so, which seemed a little high to me. Is there an industry standard for this sort of thing? I was thinking 50%.

Thanks for the help and advice as I start my new career.

 

[ngcsu2477]

I'd say the commission split mainly depends on how much work you/owner is doing. If you are finding the business yourself, quoting & binding then giving up 75% of your commission sounds pretty steep. Is that split the same on renewal business?

 

[newagent6372]

If by renewal, you mean any of her cut from her previous customers, then no.

If you mean my future commissions form customers renewing, then yes.

This lady will take me for all she can I have no doubt, and I thought it seemed high, but I have no knowledge of what an industry standard is.

 

[VolAgent]

Depending on what all you have to do to land the business, I think only 25% of the commission wouldn't be very motivating. You could expend a lot of effort for little reward. On the flip side, if you do very little to land the business, then it could be a sweet deal.

It really all depends on how much you have to do to write the account as well as what other compensation you receive.

 

[ngcsu2477]

If by renewal, you mean any of her cut from her previous customers, then no.

If you mean my future commissions form customers renewing, then yes.

This lady will take me for all she can I have no doubt, and I thought it seemed high, but I have no knowledge of what an industry standard is.

by "renewal" I mean "what do you get paid when policies renew?" In other words, you generally make x% on "new business". However, you may get paid when policies renew. It's VERY important to know what you'll make on renewals. If you're getting a ton of leads/support from the "lady", then maybe 25/75 split is okay. However, if you are "eating what you kill". Then I'd say you probably deserve +/- 50% of the commission paid to the agency (new business). On renewal, maybe a little < 50% would be fair.

 

[BigSteve]

What type of insurance are you selling? I think that makes a big difference.

 

[newagent6372]

Thanks for all the responses.

I am going to be my own agent and looking for my own business/customers. If someone calls in, whoever takes the call does all the work and gets the commission.

basically, as I understand her, she would take 75% of EVERYTHING that I make from the agencies.

I am going to be selling life, auto, home, and medical insurance, so we do a bit of everything and work with about 5 different insurance companies.

I thought 50% seemed about right for everything. Or maybe 35-40% on initial commission and I keep 100% of renewal commissions.

I don't know how common my situation is, so I trying to get a sense of what is fair or "standard" so I have some info with which to bargain with her.

Thanks for the continued responses.

 

[pbunting]

Thanks for all the responses. I am going to be my own agent and looking for my own business/customers. If someone calls in, whoever takes the call does all the work and gets the commission. basically, as I understand her, she would take 75% of EVERYTHING that I make from the agencies. I am going to be selling life, auto, home, and medical insurance, so we do a bit of everything and work with about 5 different insurance companies. I thought 50% seemed about right for everything. Or maybe 35-40% on initial commission and I keep 100% of renewal commissions. I don't know how common my situation is, so I trying to get a sense of what is fair or "standard" so I have some info with which to bargain with her. Thanks for the continued responses.

What percentage commission is being earned on the products your agency offers?

If the carrier commission is 30%, and you get 25% of that, that sucks. If you're still getting hourly to do clerical, it sounds like that's ultimately what you boss wants you to continue doing. Not selling.

 

[newagent6372]

Well, she is paying me $11 so it is nice having a base salary to go with my commission.

But it is not my own book that I am building, so that is the downside.

So should I be looking for 35-50% of commissions and renewals for myself?

 

[Sales71]

Well, she is paying me $11 so it is nice having a base salary to go with my commission.

But it is not my own book that I am building, so that is the downside.

So should I be looking for 35-50% of commissions and renewals for myself?

Usually a staff does not get renewals since the renewal is what pays for your salary and office expense and other expenses. If you wan to make more money and you think your up for the challenge just start your own agency and see how hard it is getting paid and making money.