Producers Worth It?

[insurancemansam]

Agency owners, anyone find producers just not worth the headache? In MN it is becoming standard to get 90/10 new and renewal for producers. I'm at point where I'm not sure I can grow much more, yet not sure I have time to train/ help new producers. It's tough. I have contracts with aaa, safeco, natiowide, travelers, encompass, progressive and some smaller companies. A lot for 2 people to handle. Is it worth extra work to get 90/10 split?

 

[dean8287]

Agency owners, anyone find producers just not worth the headache? In MN it is becoming standard to get 90/10 new and renewal for producers. I'm at point where I'm not sure I can grow much more, yet not sure I have time to train/ help new producers. It's tough. I have contracts with aaa, safeco, natiowide, travelers, encompass, progressive and some smaller companies. A lot for 2 people to handle. Is it worth extra work to get 90/10 split?

That split is way too high unless you are just acting as a broker and they do everything else themselves.

 

[agentinsouth]

Agency owners, anyone find producers just not worth the headache? In MN it is becoming standard to get 90/10 new and renewal for producers. I'm at point where I'm not sure I can grow much more, yet not sure I have time to train/ help new producers. It's tough. I have contracts with aaa, safeco, natiowide, travelers, encompass, progressive and some smaller companies. A lot for 2 people to handle. Is it worth extra work to get 90/10 split?

How did you come up w/ that split? That only works if you are a pseudo payroll service w/ no additional overhead.

There is a reason why the commercial agencies give 35%-40%. The average smaller personal line agency gives 40%-60%. That reason: overhead

I do know some personal lines agencies that give larger splits, however they cover zero expenses including no CSR assistance.

So, I guess the real question is, what is your true overhead, amount of back end service assistance you are going to provide, and your time worth?

 

[HCCIA]

We do a 50/25 split. You sell it. We service it. That way the producer can focus on producing.

 

[agentinsouth]

We do a 50/25 split. You sell it. We service it. That way the producer can focus on producing.

I like that-I assume full commission?

 

[HCCIA]

Yes. We are a P&C shop mostly. Average agency commission is 15%.

 

[BlockO]

We do a 50/25 split. You sell it. We service it. That way the producer can focus on producing.

agree with agentinsouth. I like that too.

how are your producer's contract set up as far as leaving the agency, non-compete, etc.? I would assume you still own the book when someone leaves?

 

[HCCIA]

Correct. We have a non-compete & non-piracy agreement with them. But they can earn equity in their book once they achieve certain levels of income. I.e. $100,000 = 10%. $200,000 = 20%..... $500,000 = 50%. 50% is the max

We service the book. Pay their CE and other expenses.
.

 

[cgreene]

I do an 80/20 split basically 10 new and 8 renewal. Our business model has very little overhead probably less than 500 a month.

 

[adnans]

How is that your overhead is less than 500 a month, you operate out of home?