P&C/Life "Partnership" split

[Whammer1249]

Hi all,

I have a friend who only works the personal lines P&C market. I only focus on Life/FIA. We're both independent,one man shops. He proposed working together. He would set up leads from his book for me to go write life/annuities. He sees a lot of lost business for himself on the life side, but has no interest in doing it himself. He will set the appointment, I would do everything else from sales, app, followup, service. What sort of split on that type of arrangement would be fair? Just looking for a starting point, and we will talk it out from there. Just want to get a ballpark of fairness. Thanks!

 

[Tahoe Ray]

Hi all,

I have a friend who only works the personal lines P&C market. I only focus on Life/FIA. We're both independent,one man shops. He proposed working together. He would set up leads from his book for me to go write life/annuities. He sees a lot of lost business for himself on the life side, but has no interest in doing it himself. He will set the appointment, I would do everything else from sales, app, followup, service. What sort of split on that type of arrangement would be fair? Just looking for a starting point, and we will talk it out from there. Just want to get a ballpark of fairness. Thanks!

50/50. No renewals.

 

[fed up]

Do you recommend his P&C business to your clients?

 

[Whammer1249]

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Yes, I do. Although I would anticipate the referrals to skew my direction because he wants to work his book specifically to get the life business out of it. My referrals towards him would be more passive. Definitely recommending him, just not actively working my book to find the P&C business.

 

[fed up]

Doesn't seem like a fair trade off. A quick email to your customers about partnering with the P&C agent should generate some leads for him. Is he your agent?

 

[Whammer1249]

Yes, he is my agent. The email idea is a good one, I'll definitely do that. It likely isn't a fair trade off, which is why I'm trying to get an idea on % split on the life business. I'm okay with it not being 50/50 to make up for the uneven referral flow

 

[fed up]

Yes, he is my agent. The email idea is a good one, I'll definitely do that. It likely isn't a fair trade off, which is why I'm trying to get an idea on % split on the life business. I'm okay with it not being 50/50 to make up for the uneven referral flow

Let me introduce you to MY insurance agent. Tom has everything I need for my personal property. If you would like me to introduce you to my agent it would be my pleasure.

50/50 split

 

[Danimal]

My suggestion would be to put him in your downline so you can send him commissions straight off the app and that way he also gets a rip on the renewal. Give him a reasonable contract and then start with a 50/50 split. To be clear, your 50% will be a little higher than his by the difference between yours and his contract levels, but after all, you are doing the work. As the life/annuity agent I would ask for some kind of sliding scale where his % might decrease to as little as 30% as you reach cumulative thresholds of "free money" in his pocket. This protects you against having to give up half of a home run annuity sale. The other way to think about it is asking how much you would be willing to pay for each of his leads. I promise him getting any split % is a way better deal for him vs. a "cost per lead" approach so he *should* be happy with a sliding scale...

Let us know how it turns out!

 

[Allen Trent]

I think 50/50 is fair on the life, but on FIA you may deserve more like 60/40 or 70/30. Also agree no need to bother with Life renewals as most are small.

Legally, he will likely need to be Life licensed for you to pay him. Also, many carriers require you to disclose if you are paying someone else any of the commission & if you are, they require that person to be appointed with the carrier.

I think you should also be getting compensated for your PC referrals to him. If you are not PC licensed, he would likely have to pay you for every referral, not just if the clients buy. If the clients buy PC & you get a commission from it, you likely need to be PC licensed. Because PC is much more labor intensive to write & service than life & more levelized commission than life, maybe 50/50 new & 80/20 on renewals.

 

[Whammer1249]

Thanks all for your help so far! I'll let you know what direction we go. Yes, he is life/health licensed. I'm getting him set up with my IMO and appointed with the same carriers as I am. My IMO doesn't assign commissions, so I should be able to easily add him to my downline, and have the carrier pay him directly when I put his name on the app. This should avoid any issues from that standpoint. We just need to work out a fair split.