Paying my Agents

[BADTROUT]

Definitely pay renewals... otherwise your people will leave and sell cars.

 

[JWP]

I overpay, and yours makes me look cheap. Mine is simple...

YEAR 1: The higher of 75% New and renewal... OR Minimum Wage
YEAR 2: The higher of 70% New and renewal... OR Minimum Wage +$1.00
YEAR 3: The higher of 65% New and renewal... OR Minimum Wage +$2.00
YEAR 4: The higher of 60% New and renewal... OR Minimum Wage +$3.00
YEAR 5: The higher of 55% New and renewal... OR Minimum Wage +$4.00
YEAR 6: The higher of 50% New and renewal... OR Minimum Wage +$5.00
YEAR 7: The higher of 45% New and renewal... OR Minimum Wage +$6.00

The rest remains at 45% or Min +$6 (they never get paid hourly, its almost always the commission that pays.

Year 3 and beyond look great! It's tough for a new agent to start on straight commission though. It takes time to learn the product in order to sell it effectively and build up some policies which are renewing. I think base+comm is best with the base pay dwindles to $0 by year 3.

As an agency owner, you want to write policies which renew year after year, so make sure the pay structure is set up so that your agents go after customers with a high likelihood of renewing year after year. If I'm only getting paid for new business, I'm only going after drunk drivers and people with gaps in insurance.

 

[BADTROUT]

Thatsbwhy i pay the same for new as I do renewal. The hourly is just a DOL pacifier giving me a little more ability to direct them than straight commission allows. They at any stage rarely get the hourly because commission exceeds the hourly and actually years 1 through 3 even does because commission is so high.