Salary if Taking Over Existing Book - New -Agent

paiste13

New Member
1
I have been approached about applying for the State Farm Approved Candidate program. There is an agency with about 1.4 million in premiums they need someone to take over. The recruiter mentioned a signing bonus as well as paid training.

Now, I am a smart person but completely ignorant about insurance, but was wondering what the general salary/commission is on this size book of business? I have a graduate degree unrelated to finance but truly enjoy talking about finance (I consider it a hobby). I am just over 30, married, no kids, and currently earn about 60K plus benefits in an unrelated, yet boring, job. Would it be worthwhile to pursue this or should I not waste my time? Can anyone give me simple numbers?

One thing about insurance that interests me is the ability to run for public office since I wouldn't have "set" hours.

Thanks a lot!
 
There isn't really a standard salary. You could probably make more money as a state farm agent because you'd be able to grow the book, but you're also at the mercy of their rates. If you like what you're doing now, I'd stay with it. If you're looking for a way out, this might be a good option.

Ask them about the commission structure, there are too many variables on that for us to give you an idea of what you could expect to be making.
 
Definatly ask about the commission structure. From what I hear the commission is variable so if your not hitting your numbers your commissions go down while still having the same overhead and service work.
 
I have been approached about applying for the State Farm Approved Candidate program. There is an agency with about 1.4 million in premiums they need someone to take over. The recruiter mentioned a signing bonus as well as paid training.

Now, I am a smart person but completely ignorant about insurance, but was wondering what the general salary/commission is on this size book of business? I have a graduate degree unrelated to finance but truly enjoy talking about finance (I consider it a hobby). I am just over 30, married, no kids, and currently earn about 60K plus benefits in an unrelated, yet boring, job. Would it be worthwhile to pursue this or should I not waste my time? Can anyone give me simple numbers?

One thing about insurance that interests me is the ability to run for public office since I wouldn't have "set" hours.

Thanks a lot!

I agree with the above posts and can also give you a positive example. I live in a small town. A friend of mine that was a Wells Fargo loan officer took over the local State Farm agency. A year later she is doing quite well. I can also tell you this, she has been working her arse off. At least in the beginning she was in her office from 8 am till 10 or 11 pm very often. Her husband is a stay at home daddy now.
 
I have been approached about applying for the State Farm Approved Candidate program. There is an agency with about 1.4 million in premiums they need someone to take over. The recruiter mentioned a signing bonus as well as paid training.

Now, I am a smart person but completely ignorant about insurance, but was wondering what the general salary/commission is on this size book of business? I have a graduate degree unrelated to finance but truly enjoy talking about finance (I consider it a hobby). I am just over 30, married, no kids, and currently earn about 60K plus benefits in an unrelated, yet boring, job. Would it be worthwhile to pursue this or should I not waste my time? Can anyone give me simple numbers?

One thing about insurance that interests me is the ability to run for public office since I wouldn't have "set" hours.

Thanks a lot!

If the book is valued at $1.4M and the average commission is 10% you get $140K.

Ask them what you can expect in retention of the existing policies. The loss ratio could be 60% after the first year. Many people stay with an agent because they know him/her and have formed a trust relationship with them.

If you buy the book, you will need to focus on retaining the clients. Call everyone a month before their policies expire. Make them feel wanted. Form a relationship with them.

The next thing is the price you will pay for the book. The going rate might be 1.25 - 1.5%. Paying a premium for a client and then losing them before receiving a commission would be painful. This will happen.

You will also be required to get securities licensed (6 and 63). These exams take more effort to pass than the P&C and Life/Health. Fail these tests 3 times and you are out of their program. As a new agent you might not have sufficient time to study once you have taken over the business.

I got my licenses through Kaplan. There were ten State Farm trainees in the cram course class. Two were on their third strike and were very worried about their next exam date. I studied hard and pass on my first attempt. I think you will have 18 months to pass these exams.

Read the agent contract thoroughly before signing it. These contracts are not written to make the agents life easy. They only benefit the insurance company.

You also want to find out if the current book has been successfully cross sold. Cross selling is a good way to bring in more premiums from the current clients.
 
hmmm with no experience in insurance how is someone supposed to run a 1.4MM agency ? Do you think SF training is enough to throw someone out to the wolfs or is real life experience needed in this situation ?

Also it may be great having this book handed to you but you also need to hit SF requirements. Now-a-days they want 40 life policies a year for a typical agent.

Not trying to stray anyone away from the offer but just think the fine print needs to be read and a lot more questions need to be asked.
 
I believe State Farm always retains 100% ownership of the book.

I'm talking about the clients who don't stay with State Farm. I heard through the grapevine that an agent who buys a book from a retiring agent of one of the other large captive companies can expect a 60% loss if they don't work on building a relationship with the existing clients.
 
I'm talking about the clients who don't stay with State Farm. I heard through the grapevine that an agent who buys a book from a retiring agent of one of the other large captive companies can expect a 60% loss if they don't work on building a relationship with the existing clients.

State Farm owns all agencies. You cannot buy a SF book. There is no guarantee that they will actually assign the whole book no matter what they tell you.
 
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