Should I Leave my Independent Agency?

[DSInsurance]

I work under a "cluster type" insurance agency. I own my own book of business and the group I work under allows me to use all their company contracts, phones, they give me an office space, printers, E & O coverage and even split contingency bonus's with me. I give them a 70/30 split (70 for me).

My predicament is I am about to enter my 3rd year and I am getting too big to manage it myself and need to hire a CSR & eventually years down the road I would like to hire sales rep and other personal as I grow. Anyways, regarding now - To hire a CSR they are stating that they will hire someone for me, but change the split to 50/50.

In my opinion I feel that I bring in straight profit for them so they shouldn't change my split, but I also don't want to be hampered with slowing my current growth of business down as they have in my contract that I can't hire a personal sales rep.

It is a great deal for someone starting out, but now nearing a 900K in book of business, I am wondering if it would be best to leave the cluster I am in and take my book of business with me and get my own contracts with my carriers that I currently work with. This would eliminate my 70/30 split - give me extra $$$ to hire a CSR, I would obviously have to pay for all the above in E & O, office equipment, phones, deal with the company BS, etc.

What are some of your thoughts on what some of the experienced people here would do? I am primary personal lines guy with some commercial as well. I also enjoy the cluster group I work under and do not want to burn any bridges, but when I see that my split is paying about $4,000 monthly and I am growing very quickly, I just feel I could be putting that money into my own pocket/agency.

Thanks for any feedback

 

[nyc2phi]

I work under a "cluster type" insurance agency. I own my own book of business and the group I work under allows me to use all their company contracts, phones, they give me an office space, printers, E & O coverage and even split contingency bonus's with me. I give them a 70/30 split (70 for me). My predicament is I am about to enter my 3rd year and I am getting too big to manage it myself and need to hire a CSR & eventually years down the road I would like to hire sales rep and other personal as I grow. Anyways, regarding now - To hire a CSR they are stating that they will hire someone for me, but change the split to 50/50. In my opinion I feel that I bring in straight profit for them so they shouldn't change my split, but I also don't want to be hampered with slowing my current growth of business down as they have in my contract that I can't hire a personal sales rep. It is a great deal for someone starting out, but now nearing a 900K in book of business, I am wondering if it would be best to leave the cluster I am in and take my book of business with me and get my own contracts with my carriers that I currently work with. This would eliminate my 70/30 split - give me extra $$$ to hire a CSR, I would obviously have to pay for all the above in E & O, office equipment, phones, deal with the company BS, etc. What are some of your thoughts on what some of the experienced people here would do? I am primary personal lines guy with some commercial as well. I also enjoy the cluster group I work under and do not want to burn any bridges, but when I see that my split is paying about $4,000 monthly and I am growing very quickly, I just feel I could be putting that money into my own pocket/agency. Thanks for any feedback

You should check the buy out clause with your cluster. It may be difficult to just take your book and walk away. You may owe them fees and you may not be able to go after those carriers you used through them because of a clause in your contract.

 

[DSInsurance]

The only clause is that they will still have the 30% split for up to 12 months after I leave - so all my renewals would still be on the 70/30 split and new business would not be split, no clauses or rules on companies or anything.

 

[nyc2phi]

The only clause is that they will still have the 30% split for up to 12 months after I leave - so all my renewals would still be on the 70/30 split and new business would not be split, no clauses or rules on companies or anything.

I see no reason to not walk away then...

I would make sure all your ducks in row first such as making sure you can get those contracts if you do leave.