Which Route to Go? Opinions Please!

[asummer74]

I have several years P & C and Health claims experience. I have outside sales exp as well but in non insurance field. I recently obtained by P & C and Life license after deciding to go into insurance sales. My question is: Is it better to go work for an independant agent in town, as a sub-contractor, working with multiple carriers. The agent has a lot of walk in business etc. and it is a well known agency. I have spoken with him and he is interested in bringing me on. I have to see what exact commission splits he offers etc.. first. But I feel working with an independant broker, one with many companies might put me on a more competitive edge as far as rates. Assuming I have a decent commission split and renewals. I would also like to add in Final Expense sales down the line as I get more experienced. I like the fact that I would be a 1099 employee and kind of in control of my book of business per se.

Or~
I also have interviewed and been offered position with Captive agent, who is offering base salary of 25k, 8 % on P & C, 35% commission on Life. The thing that doesn't sit well is no renewals on anything I write, and obviously I do not keep my book of business as I am working for him.

Keep in mind, my income is not sole income in household, spouse is main income, so I do have flexiblity to be commission based. I do know insurance already, familiar with the terms etc. I just don't know the route to go. I have heard so many negative things about not signing on with an agent that will not let you get renewals. I don't want to waste my time bring in all my contacts and then can't receive any renewals, also its only one company, if rates aren't competitive, then I can't even write the business.

What are all your thoughts?

 

[Josh]

I think far too many agents to readily discount the 25k part of the puzzle.

If you're hung up on owning the business and feel like that's a bad deal, don't do it. It's probably a great way for you to learn about the industry, work with a well-known company, and be guaranteed to make money. If you're going to resent it the time you're there, then don't do it.

If you go with the indy and grow your own book, you'll probably get frustrated more quickly and also end up making less money.

 

[asummer74]

I do see the value in the 25k salary, thats why I'm so torn. I know its tough to make decent money the first couple of years of insurance,and one has to be patient and persistant. It's just I have seen a lot on these boards that its not always great to be captive with one company, and its not good to take on a contract with no renewals. I didn't want to take a bad deal. I am not sure what is better deal. It so hard deciding what route to go.. I want to make sure its the right route ya know?

 

[Josh]

One thing you know but probably aren't giving enough weight is that this is just a bunch of people on the internet. This forum quickly dismisses lower wages in exchange for reduced commissions. Also, most of what you're reading has more to do with life insurance than the P&C world. Most CSRs working at State Farm, Allstate, etc end up making more than most new agents do and last longer in the business.

If you're doing P&C and you're taking a salary, the agency hiring you would be out of their mind to offer renewals. That's just my opinion and I'm also just some guy on the internet, but a salaried position in the insurance world doesn't generally include you getting renewals. I've worked for two of the three largest health insurance companies in the country. I've helped them grow their businesses and in exchange for that they paid me well. When I left, I didn't have any clients I walked out with, but that's part of the turf.

Someone is offering you $25k/year plus some commissions to work for them. That's a job above $10/hour and in most parts of the country that's not a bad offer. I couldn't pay my rent off that, but I also live 20 minutes from the White House.

Again, most of this board is folks referencing life insurance products and/or Medicare, little or nothing to do with P&C. If you're an indy agent and someone wants you to assign your commissions with no renewals, that's a bad deal. If you're getting a salary, that changes everything.

 

[asummer74]

One thing you know but probably aren't giving enough weight is that this is just a bunch of people on the internet. This forum quickly dismisses lower wages in exchange for reduced commissions. Also, most of what you're reading has more to do with life insurance than the P&C world. Most CSRs working at State Farm, Allstate, etc end up making more than most new agents do and last longer in the business.

If you're doing P&C and you're taking a salary, the agency hiring you would be out of their mind to offer renewals. That's just my opinion and I'm also just some guy on the internet, but a salaried position in the insurance world doesn't generally include you getting renewals. I've worked for two of the three largest health insurance companies in the country. I've helped them grow their businesses and in exchange for that they paid me well. When I left, I didn't have any clients I walked out with, but that's part of the turf.

Someone is offering you $25k/year plus some commissions to work for them. That's a job above $10/hour and in most parts of the country that's not a bad offer. I couldn't pay my rent off that, but I also live 20 minutes from the White House.

Again, most of this board is folks referencing life insurance products and/or Medicare, little or nothing to do with P&C. If you're an indy agent and someone wants you to assign your commissions with no renewals, that's a bad deal. If you're getting a salary, that changes everything.

Thank you very much Josh for your input, you have given me much to consider in new light!

 

[Josh]

Thank you very much Josh for your input, you have given me much to consider in new light!

You're most welcome!

It's always interesting to see what someone's perspective is that rolls into here without any background. I never stopped to consider the difference between the two because I always thought it was obvious, but clearly it wasn't. Glad to help!

 

[AgentProvocateur]

I do see the value in the 25k salary, thats why I'm so torn. I know its tough to make decent money the first couple of years of insurance,and one has to be patient and persistant. It's just I have seen a lot on these boards that its not always great to be captive with one company, and its not good to take on a contract with no renewals. I didn't want to take a bad deal. I am not sure what is better deal. It so hard deciding what route to go.. I want to make sure its the right route ya know?

If you need a job & income now, the position with the captive agent is something you should consider. But if you are looking for a career P&C position with income growth, the independent agent position has better potential. Your original post indicates you may be able to get by on straight commission for the first few years. If you are successful at sales, you will be much better off 5-10 years down the line with the independent agency, assuming they give you a renewal split and vesting in your book. I agree with Josh the captive agent position is not a bad deal, but it is a different deal.

 

[Josh]

If you need a job & income now, the position with the captive agent is something you should consider. But if you are looking for a career P&C position with income growth, the independent agent position has better potential. Your original post indicates you may be able to get by on straight commission for the first few years. If you are successful at sales, you will be much better off 5-10 years down the line with the independent agency, assuming they give you a renewal split and vesting in your book. I agree with Josh the captive agent position is not a bad deal, but it is a different deal.

The downside is the number of agents that succeed starting independent vs starting salaried.

 

[asummer74]

If I go sub contractor route, then I am responsible for E & O etc.. correct?

 

[Josh]

If I go sub contractor route, then I am responsible for E & O etc.. correct?

Every situation is different. Most likely not.