Who Stands Up for the Agent?

[insurehound]

What group/association stands up for the agent? If you want to do business with a carrier, they send you over a contract that you have to sign. There's no negotiation. When carriers reduce commissions or change the rules, what can you do?

I know some of you will say, "just don't do business with that carrier" but as some know, once one carrier finds out they can further screw the agent, others will follow.

We need an association that independent agents can join so that we have some bargaining power with the carriers. Otherwise, we will always be the folks who take it up the you-know-what when there's an excuse to lower our commissions. I'm sounding like a Union guy

 

[lqdirect01]

There is no real association that has bargaining power with the carriers. An association like the ILIAA (which I am a member of) does have contracts available to life agents.

The real power is with National Marketing Organizations (NMO) when it comes to carriers. They can put pressure on a carrier for certain changes such as commission or incentives offered to agents.

 

[scagnt83]

If there was an association at the GA level there could be some leverage against the carriers, but its hard to do on an individual agent level. Production equals leverage, so some of the top GAs do have bargaining power with certain carriers....

 

[Mark]

As an IMO, let me tell you that we stand up for you and when they cut your commissions, they also cut ours. We tell the company if they don't act right we will just move all of our agents to another company.....

Because of productions and the number of agents that we have, we can make insurance companies do things that you can not.

I also think if one company is not doing you right and it can't be fixed, then find another one that will.

 

[insurehound]

Sounds like a sales job to me Mark. Moving to another company doesn't solve the issue. As I said in my earlier post, once one insurance company sees that they can lower commissions, others follow. And with all due respect, the day I trust an IMO to do whats best for me is along way away. The only person who has my best interest at heart is me. The same goes with other independent agents.
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...and we, the agent, are the GAs and IMOs...it's OUR production not the IMOs so we should have a say and not leave it to GAs or IMOs to whats best for us. I find GAs useful but they have proven to me over and over that they do whats best for them first and us second. And usually they do whats best for us when it affects them as well.

 

[scagnt83]

Moving to another company doesn't solve the issue. As I said in my earlier post, once one insurance company sees that they can lower commissions, others follow. And with all due respect, the day I trust an IMO to do whats best for me is along way away. The only person who has my best interest at heart is me. The same goes with other independent agents.
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I would have to disagree.
With very large life and annuity cases when companies are competing for the business, part of the competition is comp level on the sale. And smart agents play the companies against each other on this aspect of negotiations. Why will the company pay a higher comp on huge cases? Because the more $$ you bring them the more leverage you have!

If agents stop producing all of a sudden after a commission cut and sales bottom out, why the hell would other companies cut their comp, just to have agents (aka: new sales) leave?
Your rationale isnt logical in a free market economic system. Competition creates innovation and drives comp levels.

And the same holds true for IMOs and GAs. Its to their benefit to have a higher comp level for agents. And if your GA isnt all that it could be, find one that is and the bad ones will die off.
Remember, you and your GA should be on the same team...

 

[Mark]

Which ins company is lowering your commissions or doing your wrong?

 

[insurehound]

That's great if you have large sales consistently but what about the little guy who is consistent on small and medium cases?

Maybe that's more true on the Life side but what about Health? We used to make 12% and now were down to something like 7% with most carriers. We use to get paid on COBRA people and now we're seeing the trend of that going away.

Using you logic, you would think that other Health companies would have kept commission levels the same when one dropped but that is not what has happened. They all have dropped.

Are you a GA scangt83?

...and what about negotiating other areas of the 10 page contract that an agent signs? Can a GA negotiate the terms of that as well?

 

[LGilmore]

"once one insurance company sees that they can lower commissions, others follow"

You're making the incorrect assumption that insurance companies will work together. They don't, they compete.

Moving to another carrier means your NEW business moves to that carrier and the company that slighted you loses the potential NEW business you bring in.

With health it's kind of a tough nut right now. In some states there's commission caps imposed.

In 20 years I've never what you suggesting done by the group of carriers in my state.

 

[scagnt83]

That's great if you have large sales consistently but what about the little guy who is consistent on small and medium cases?

Even the guys bringing in the big single cases dont make all that much more than an average indy agent with a commission oriented contract.

If theres competition between carriers you can get a bump on that case...and it can create more leverage from the fact that you bring in big cases, and more importantly your a high producer. But your not talking about a real huge difference percentage wise on average cases.

I was more tying to illustrate the fact that as an indy producer you are a client of the insurance company you happen to choose to place business with. And the fact that you have a choice gives you leverage over them no matter what production level your at.

Maybe that's more true on the Life side but what Health? We used to make 12% and now were down to something like 7% with most carriers. We use to get paid on COBRA people and now we're seeing the trend of that going away.

Admittedly I dont do a whole lot of health policies. To be honest I hate selling health insurance! (nothing against you health guys....its a necessary evil)
But a decent IMO/GA/etc should be able to get you decent health commissions depending on your state (state dependency is because of laws/mandates by gov. mostly).
But when I say decent I mean over 15%.

Here in SC the company I do most of my HI through had me on a production oriented (sliding scale) commission structure as an individually appointed agent. I started at 15% (and stayed there most years). When I got around to appointing myself through my GA, I got bumped up to 25% for the same amount of production.

Using you logic, you would think that other Health companies would have kept commission levels the same when one dropped but that is not what has happened. They all have dropped.

In general, yes. Especially for individual appointments. But the health insurance industry in general has had its profit margins slashed over the years. But I know that plenty of people in plenty of states are making more than 7% on HI. But again, HI is more state specific....

Are you a GA scangt83?

No. But I am lucky enough to work for a quality one that works for me, here in Greenville, SC. What state are you in?

...and what about negotiating other areas of the 10 page contract that an agent signs? Can a GA negotiate the terms of that as well?

Hypothetically anything not mandated by law, would be negotiable in a contract if you had the leverage to negotiate it...

But you probably have more control over your contracts than you may think.
Generally speaking, going through a GA/IMO/etc is the best way to get a higher paying contract. Most agents who are diligent will shop the GAs and IMOs and compare contracts, back room support, field support, etc. So when one comes in higher than the other, go tell the other and see what they will do about it to gain your business. And remember, you signing up is doing them a favor more than its doing you. Your production is their production, remember that when negotiating. If you are an above average producer then your GA will want to retain you, and to an extent will probably be willing to take a haircut to keep you on board if your requests are reasonable and in line with industry standards.
I know that at my local GA nobody has exactly the same contract, but we are on a production oriented model.

But there is more than just commission to think about when deciding on a GA or IMO.
A well connected local GA with local support is a huge benefit in my opinion. I realize that this might not be an option for everyone, but I think that it should be your first if available.
My comp is in line with national standards for an indy agent, but could be slightly more if I chose to go a different route. But with my local GA im hooked up with almost all of my overhead is taken care of, I get an assistant, I get field support when wanted, and I get tons of backroom planning support.

I guess im saying that not knowing your exact situation, you probably need to shop around some....