by ajh1204 » Sat Sep 22, 2012 01:15 am
Hi everyone, im new to ampm, and saw how everyone had a vast knowledge of the insurance business. I had a question and im hope everyone can help me.
I had a question about how agencies compensate new producers with existing books of business. I know that agencies want to own the book so if the producer quits they don't loose revenue. But i wondered how do they compensate the producer for taking over that book.
If a producer has a existing book of business and gets hired by an agency, how does the agency compensate the producer for taking over their book of business. Does the agency offer the producer equity in the agency for the value of the Book or phantom non voting stock, or do they just buy it out cash.
Does an agency even compensate the producer for taking over the book.
thanks
I had a question about how agencies compensate new producers with existing books of business. I know that agencies want to own the book so if the producer quits they don't loose revenue. But i wondered how do they compensate the producer for taking over that book.
If a producer has a existing book of business and gets hired by an agency, how does the agency compensate the producer for taking over their book of business. Does the agency offer the producer equity in the agency for the value of the Book or phantom non voting stock, or do they just buy it out cash.
Does an agency even compensate the producer for taking over the book.
thanks
Posted: Mon Sep 24, 2012 12:30 pm Post Subject:
If a producer has a existing book of business and gets hired by an agency, how does the agency compensate the producer for taking over their book of business
Why would a producer do this, unless he/she was intending to leave the business? Makes no sense to me.
Owning a book of business is generally thought to mean "owning the renewals" -- commissions paid for past sales. Renewals can be paid to a person after they leave the business as long as there is a written agreement concerning the right to receive renewals. Sell your book of business without such an agreement, and the renewals belong to the new owner of the book.
Does the agency offer the producer equity in the agency for the value of the Book or phantom non voting stock, or do they just buy it out cash.
Again, this goes to the motivation of the seller. Will there be more long-term benefit resulting from the sale of one's book of business? How is that valued? What guarantee is there in that exchange?
Does an agency even compensate the producer for taking over the book.
Would you simply give your [home, car, boat, bank account] to someone else, just for the heck of it?
Add your comment