Proposition

Discussion in 'General Insurance Agent Discussions' started by joshril, Dec 8, 2006.

  1. joshril
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    joshril Guru

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    I met a guy today that owns a P&C agency that has been in business a long time in my town. They also adertise that they offer health but they hate to write life and health. The offered my a deal working out of their office where I would get all the health, life, and securities leads for a 70(my)/30(theirs)% split. What do you guys think about this???
     
  2. James
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    Not a bad deal at all if they are establish agency. Yet though I would consider asking for some guarantee on how many leads they are talking about, as in if they don't supply XX amount their split goes down.
     
  3. somarco
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    somarco Guru

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    Is this a captive agency such as State Farm? If so, you may not like the carrier you are required to use or the commission level.

    A local SF agent approached me about a similar deal a few years ago. At first it sounded great until I asked about the comp on life. He proudly told me they got 35% on life products.

    I passed . . .
     
  4. Guest
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    Only if...

    They are an independent agency
    They only get a split of business produced through the agency, not your own lead generation

    Negotiate that 70/30 or make it a first year commission split only
     
  5. Sam
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    Sam Founder Administrator

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    Make sure that you own the business. It sounds like a decent deal, especially if they give you office space. You may even be able to use their secretary. Just make sure that you own it, and that you don't have to sign a non-compete.
     
  6. Crabcake Johnny
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    Crabcake Johnny Guru

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    Very good advice. The entire reason for being in this business is to build a book of business. Say you worked your tail off for 3 years then decided to be independent. If the business belongs to your agency you now start from scratch.

    Something tells me that one of the stipulations to this agreement is they'll want to own the book of business.
     
  7. James
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    IMHO, most sucessful establish Agencies will not, nor should they consider any Agent to own the book that was established within the Agency. That would defeat the idea of building an Agency.

    Now if they will great but I doubt it. So ask for a base, likely the Agency will know the amount of business they can actual produce. Ask for support, that would be the draw to an Agency, such as a office, secretary, back room support.
     

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