Profit Sharing & Overrides

pmtaf

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Hello all, I've asked several people this and I can't seem to get an answer so I thought everyone here could help me out. What is average percentage of commission for profit sharing? I know that there is many variables but I'm just looking for an average on an average year idea. Nothing in stone. Also, for commission overrides, I've been told an additional 3% per quarter is the average. Does that sound about right to you guys?

Thank you for your help!
 
Hello all, I've asked several people this and I can't seem to get an answer so I thought everyone here could help me out. What is average percentage of commission for profit sharing? I know that there is many variables but I'm just looking for an average on an average year idea. Nothing in stone. Also, for commission overrides, I've been told an additional 3% per quarter is the average. Does that sound about right to you guys?

Thank you for your help!

Who told you that? Are you joining an Alliance?
 
I am joining a cluster but wanted just rough ideas on what others have experienced.

Yes some cluster offer that..it comes from the deal they have with the insurance companies. Usually paid Every 3 month.
 
I am joining a cluster but wanted just rough ideas on what others have experienced.


You are going to end up paying a lot more in fees than get bonuses. If you hit 500k with most carriers, you will qualify for profit sharing anyways. You don't need a cluster!
 
You are going to end up paying a lot more in fees than get bonuses. If you hit 500k with most carriers, you will qualify for profit sharing anyways. You don't need a cluster!

I appreciate the feedback but its off topic and away from from the original question. I was simply asking, what is an average percent of profit sharing. I understand it can be zero and up with many variables. I'm just asking... On an average year what is an average percent of profit sharing?

I do not mean to sound rude or ignorant, but I've asked that question to numerous agency owners and insurance professionals and that subject is always skirted around like the plague. I'm not understanding why.

To me it's simple. Hypothetically, I have a book of $100,000 in premium. I got a profit sharing check of $5,000... I'd answer, "on average I get 5% Of premium" To others its not so simple. I have yet to have anyone and I mean anyone give an average. I guess I am so hard up for this information because I've been told time and time again that an agency lives off of profit sharing. Ok, I get that but no one will give real life examples. Just boggles my mind.
 
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I appreciate the feedback but its off topic and away from from the original question. I was simply asking, what is an average percent of profit sharing. I understand it can be zero and up with many variables. I'm just asking... On an average year what is an average percent of profit sharing? I do not mean to sound rude or ignorant, but I've asked that question to numerous agency owners and insurance professionals and that subject is always skirted around like the plague. I'm not understanding why. To me it's simple. Hypothetically, I have a book of $100,000 in premium. I got a profit sharing check of $5,000... I'd answer, "on average I get 5% Of premium" To others its not so simple. I have yet to have anyone and I mean anyone give an average. I guess I am so hard up for this information because I've been told time and time again that an agency lives off of profit sharing. Ok, I get that but no one will give real life examples. Just boggles my mind.

The reason why they don't answer is because they don't know... There are way to many variables. For example... You could have a 15% loss ratio with 500K of new business...you would think you would get profit sharing, but that is not the case all the time. If people in the network is creating a high loss ratio for the cluster, than you are SOL for profit sharing.

Like I said, what is the point of profit sharing when you are paying them more in fees every month.
 
You are going to end up paying a lot more in fees than get bonuses. If you hit 500k with most carriers, you will qualify for profit sharing anyways. You don't need a cluster!

That's a very ignorant statement. The whole point of being independent is having many carriers to choose from. So, if you are talking about profit sharing, how long would it take to get to $500k when you have 10+ carriers? Especially if you are by yourself?!

The biggest benefit to being with a cluster is getting access to good carriers. My best carrier that I write the most business with, would not even look at me without being with my cluster. There would be a lot of missed business by not having access to good preferred carriers that you are not taking into account. Additionally, there are many new business, renewal, and misc bonuses that wouldn't be available otherwise.

With that same carrier, if you are appointed with them without being in my cluster, they offer 20% less commission on renewals if your PIF is less than 350. With my cluster, I automatically get the full commission because I am with them. It would take a few years to get that many policies with one carrier when you are independent and by yourself.

You have no idea what you are talking about, or you were dealing with the wrong cluster.
 
That's a very ignorant statement. The whole point of being independent is having many carriers to choose from. So, if you are talking about profit sharing, how long would it take to get to $500k when you have 10+ carriers? Especially if you are by yourself?! The biggest benefit to being with a cluster is getting access to good carriers. My best carrier that I write the most business with, would not even look at me without being with my cluster. There would be a lot of missed business by not having access to good preferred carriers that you are not taking into account. Additionally, there are many new business, renewal, and misc bonuses that wouldn't be available otherwise. With that same carrier, if you are appointed with them without being in my cluster, they offer 20% less commission on renewals if your PIF is less than 350. With my cluster, I automatically get the full commission because I am with them. It would take a few years to get that many policies with one carrier when you are independent and by yourself. You have no idea what you are talking about, or you were dealing with the wrong cluster.

Perhaps... Maybe my cluster is the problem. I have 500K with a few of my carriers and I am only 5 years in.. So I would be profit sharing anyways. True, I have access to 10+ carriers... So what, only 2 or three are competitive right now anyways.

Sounds like you are getting personal, relax buddy. I just want people to know there are other options.
 
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