livebetter
New Member
- 13
I would be interested in the opinions of independent agents that have been in the business for awhile.
Assume you were bringing in a new agent that was truly new to the industry - clever, educated, well-connected, and experienced in sales - but still completely new to the insurance agency.
This new agent passed her exam, and got her license for P&C, and you agreed to a 50/50 split.
What the agent is bringing to your agency...
new business
half of her part of E&O insurance
What you are offering
training regarding your P&C products and probably regular assistance for awhile as the new agent is learning
the other half of the additional E&O insurance
At this point, the agent has paid all the costs for getting her license, but you are considering partial reimbursement. You've also agreed to pay part (possibly all) of her continued education. Your office is small, and while there's a space for her, she has a professional home office, as well.
You will likely retire in 10-15 years.
What is a reasonable expectation for the agent for her book of business when you retire/sell your agency?
From the agency owner standpoint, you will want all her business to belong to you to make the agency more valuable at the time of sale.
From the agent standpoint, you don't want to build a book of business for 10-15 years only to have to lose all of it (with a possible buy-out, of course) when the agency owner retires... and have to either start over or retire from insurance yourself.
I realize the agent could possibly continue with the same terms under the new owner. Of course, that would have to be in the future contract between the owner and the buyer and seems like a difficult term to agree on at this point.
The agent feels like this is her own business that she is building for future residuals - paying many of her own expenses, etc. The agent owner feels that he is offering training and connections to insurers as well partial reimbursement on some expenses and should retain the book of business when he sells the agency.
Incidentally, it is assumed that if the agent leaves the agency before the owner retires, the agency will retain all of the agent's business. This issue is just related to the agent's book of business when the owner retires and sells the business.
Thoughts? What is a reasonable expectation for the agent?
Assume you were bringing in a new agent that was truly new to the industry - clever, educated, well-connected, and experienced in sales - but still completely new to the insurance agency.
This new agent passed her exam, and got her license for P&C, and you agreed to a 50/50 split.
What the agent is bringing to your agency...
new business
half of her part of E&O insurance
What you are offering
training regarding your P&C products and probably regular assistance for awhile as the new agent is learning
the other half of the additional E&O insurance
At this point, the agent has paid all the costs for getting her license, but you are considering partial reimbursement. You've also agreed to pay part (possibly all) of her continued education. Your office is small, and while there's a space for her, she has a professional home office, as well.
You will likely retire in 10-15 years.
What is a reasonable expectation for the agent for her book of business when you retire/sell your agency?
From the agency owner standpoint, you will want all her business to belong to you to make the agency more valuable at the time of sale.
From the agent standpoint, you don't want to build a book of business for 10-15 years only to have to lose all of it (with a possible buy-out, of course) when the agency owner retires... and have to either start over or retire from insurance yourself.
I realize the agent could possibly continue with the same terms under the new owner. Of course, that would have to be in the future contract between the owner and the buyer and seems like a difficult term to agree on at this point.
The agent feels like this is her own business that she is building for future residuals - paying many of her own expenses, etc. The agent owner feels that he is offering training and connections to insurers as well partial reimbursement on some expenses and should retain the book of business when he sells the agency.
Incidentally, it is assumed that if the agent leaves the agency before the owner retires, the agency will retain all of the agent's business. This issue is just related to the agent's book of business when the owner retires and sells the business.
Thoughts? What is a reasonable expectation for the agent?