Offer from Indy agent

[SeaDeezKnots]

I have been lurking around the forum for awhile now and have found this board to be an immense wealth of information. For someone contemplating a career change to insurance from healthcare, I can thank many of you for allowing me to do so with my eyes wide open.

In the meantime, I've passed the P&C license exam (Texas) and have been approached by an indy agent about a job. His pitch is that once I am licensed, he will give me a job where all first year commissions are split 50-50 and there are no commission splits on renewals. To this point, I haven't committed to anything as I wanted to investigate first.

As it seems to me, this is a starvation plan. Am I wrong? Please advise.

 

[xrac]

What is he providing for the 50% split. He is asking for a lot unless he is providing a lot. A 30/70 split would be more reasonable.

 

[SeaDeezKnots]

As I understand it, he's offering access to his carriers, office support, and covering the E&O. It seems hard enough to make it starting out if you're giving up that much. I am a newcomer as I said before and I can't imagine the training being as comprehensive as it needs to be if I'm required to only come in once a week from the very beginning. This is a straight commission position and I'll still have to pay phone, fuel, and other expenses. Any way I cut it, this seems to be a very unfavorable arrangement for not just me, but anyone.

I am assuming you mean 70 to the producer/30 to the agency. Am I correct? Also, should any split be in order on renewals?

 

[xrac]

As I understand it, he's offering access to his carriers, office support, and covering the E&O. It seems hard enough to make it starting out if you're giving up that much. I am a newcomer as I said before and I can't imagine the training being as comprehensive as it needs to be if I'm required to only come in once a week from the very beginning. This is a straight commission position and I'll still have to pay phone, fuel, and other expenses. Any way I cut it, this seems to be a very unfavorable arrangement for not just me, but anyone.

I am assuming you mean 70 to the producer/30 to the agency. Am I correct? Also, should any split be in order on renewals?

Yes! That is what I mean. That is what I would ask him for with 100% of the renewals. All he can say is no.

 

[patch36]

Is he providing office space and training? You will starve on your own unless you are experienced in sales. Take it and negotiate for a better deal once you prove yourself.

 

[LGilmore]

Not a good deal.... You'd be better off going career agency and learn first and then go indy.

a 50/50 split? Unless he's out on sales calls with you nope.

 

[SeaDeezKnots]

An office would be a possibility in the future but it just seems that this is not an equitable arrangement. I feel it would benefit me more to work for a large shop like AON or Marsh to get the training, experience, and support I need before going this route.

Any thought or advice would be greatly appreciated.

 

[OHInsAGNT]

Not a good deal.... You'd be better off going career agency and learn first and then go indy.

a 50/50 split? Unless he's out on sales calls with you nope.

Why would you think she would be better off with an Indy agency? If she is on a 50/50 split now, that puts her at 7.5% first year on the typical P&C commission. With a career company she'll get 8% and have no ownership of the business.

50/50 isn't bad with 100% of renewals. Just make sure you own the business and can take it with you or get bought out. You can't own your business at a career agency.

Also, don't drive to see anyone unless they have 5 cars, 4 drivers, 2 houses a boat and a motorcycle. Otherwise, you'll starve. Your first commission on each policy is about enough to cover marketing cost. P&C is all about renewals. You can sell over the phone. Driving will instantly put you in the whole on the first renewal too.

 

[xrac]

An office would be a possibility in the future but it just seems that this is not an equitable arrangement. I feel it would benefit me more to work for a large shop like AON or Marsh to get the training, experience, and support I need before going this route. Any thought or advice would be greatly appreciated.

Before you rule out this offer have a heart to heart talk about the split and see if you can't come up with something you both can live with. You will probably add almost nothing to the overhead and will generate extra income for the agency.

 

[SeaDeezKnots]

Before you rule out this offer have a heart to heart talk about the split and see if you can't come up with something you both can live with. You will probably add almost nothing to the overhead and will generate extra income.

Thanks for the advice. I like the idea of working with this agency because its independent, they have all the markets, and focus more on the commercial stuff than personal insurance. If I can make the arrangement a little more palatable, I'll probably sign on.