To know how an insurance agent earns, you must be aware of their mode of work. Based on how they work, insurance agents are broadly classified into two types:
- Captive agents - Those who represent a particular insurance company.
- Independent agents - Those who sell insurance products from various insurance companies.
How much do the Captive agents earn?
Captive agents are employees of an insurance company and usually have fixed wages. The initial few months would be the training and learning phase for such an agent. Thereafter, the insurers usually set a target for each agent which has to be fulfilled within a pre-determined time period. According to his or her performance, his or her salary gets revised. There might even be a scope of earning performance bonuses, after the agent meet the target. The salary structure usually depends on a number of factors like the location, the company etc.
TopHow much do the Independent agents earn?
The independent agents represent multiple companies. They don't get a fixed remuneration from the insurance companies. They usually receive a percentage commission from the insurer, which depends on the amount of insurance they sell. Moreover, revenue is only generated on sale of new policies. Thus, to earn more, the agents need to sell more insurance policies.
TopWhat is the range of income?
The average income of an insurance agent is around $62,970 for a year, as the May 2011 reports of the Bureau of Labor Statistics have pointed out. However, since the individual income is generally based on the commissions earned, skilled agents having a large number of clients can earn much more than the BLS mean. The yearly income of around 50 percent of the agents ranges from $33,850 to $72,490, with the experienced ones earning as high as $115,300 on an average per year or even more than that.
| Employment | Annual mean wage | Annual median wage |
|---|---|---|
| $3,21,780 | $62,970 | $47,450 |
| Area Names | Employment | Annual mean wage | Annual median wage |
|---|---|---|---|
| Arizona | $6,390 | $51,980 | $40,750 |
| California | $23,890 | $75,140 | $59,240 |
| Florida | $26,940 | $59,420 | $46,530 |
| Kansas | $4,070 | $56,010 | $45,130 |
| Nevada | $2,250 | $51,580 | $35,640 |
| New York | $18,580 | $74,890 | $57,180 |
| Texas | $26,490 | $57,820 | $40,630 |
| Washington | $5,830 | $54,710 | $46,770 |
How much can be the agent commission?
The independent agents working for the insurance companies usually earn from the commissions after each policy sale. The agent compensation is usually paid only for the initial year of a new policy. The agents selling homeowner's insurance and auto insurance receive around 10 to 15 percent commission on the first year's policy premiums. The allowed compensation depends on the insurers though, and can be as low as 8 percent or as high as 15 percent. Life insurance agents earn a lot more, typically in the first year only. They usually receive most of the premium that the policy holder pays in the first year, or even all of it at times.
TopIs there a scope for earning more?
Apart from the standard commissions which solely depend on each individual agent's performance, the insurance agents have the scope of earning more if the client renews the coverage. The renewals commissions typically range between 2 to 5 percent for each policy.
Along with that, any insurance companies also offer year-end bonuses and non-cash rewards like trips and prizes for the insurance agents.
TopReading discussions & reading
- Qualifications you need to be an insurance agent
- How to become an insurance agent
- Can you make millions as an agent?
- What are the commission opportunities of an agent?
- What makes insurance agents click in the industry?
Posted: Mon Nov 03, 2008 11:38 am Post Subject:
I'll get a referral or two and life will be simpler.
i hope so Mark... :wink:Posted: Mon Nov 03, 2008 05:48 pm Post Subject:
Thanks Lori, you've certainly given my day a bright start. I hope yours is also going great. :P
Posted: Sun Nov 09, 2008 06:13 pm Post Subject: He is his architect
The insurance agent can all the money he wants in alife time in one year if he want it that way. hence, it depends on his hard work of openning and closing of sale that makes him his commission.
Posted: Tue Nov 11, 2008 10:40 pm Post Subject:
Whaaaat?
Posted: Wed Dec 17, 2008 08:29 am Post Subject: You earn what you keep.
My agency generates about 250K in revenue, which I use to pay myself, the staff, and expenses. Sometimes, there's not enough for me.
Posted: Mon Dec 29, 2008 09:41 pm Post Subject:
"only 6 months in= $265,000+
And thats not including the books of business I bought (an extra $320,000+)"
"Is that 265K premium dollars or gross paychecks you write yourself?"
"Pay checks. I have a few BIG BIG commercial accounts."
WOW. I have to call B.S. when I see it, and I see it everywhere. First of all, I'd bet the farm that the poster claiming to have made $265,000 in 6 months is full of sh*t.(not that i disagree, just need to clean it up for ya' hon--lori) I've been an independent agent for about 10 years and have a sizable book, but that amount is ridiculous. I could see that amount being earned premium, but for the first 6 months in the industry I call BS. I've insured auto dealerships that pay over $1,000,000 in premium, but accounts of that size are heavliy marketed and VERY tough to get. Even harder to keep.
Maybe if your daddy owns the dealership you could get it, otherwise the odds of getting accounts that size the first 6 months in are ZERO. Why? Because A) Unless you have years experience, you won't know WTF you are doing to land it B) Clients quickly will know you don't know WTF you are doing C) Someone who does know WTF they are doing will come along and steal it.
Posted: Tue Dec 30, 2008 12:19 pm Post Subject:
CobbNero has thrown down the red flag!
Let's do some math:
$265,000 in commission in 6 months would require a minimum of $1,325,000 in premium IF the agent got 20% commission.
Somebody correct me if I'm wrong but isn't typical P & C agent commission in the 10% to 15% range on average?
Using 10% commission the premium requirement to earn $265,000 would be $2,650,000.
To Easy wrote:
I have a few BIG BIG commercial accounts.
CobbNero wrote:
I've insured auto dealerships that pay over $1,000,000 in premium, but accounts of that size are heavily marketed and VERY tough to get.
CobbNero I fail to see the bllsht. Seems to me if the guy specializes, say in auto dealerships, the agent only needs 3 or 4 to earn that kind of money. Granted a brand new agent with zero experience couldn't do that. But a brand new agent being trained by his Father who has owned an agency or owns the agency could.
A brand new agent with only 6 month experience probably wouldn't know about the "Agent of Record" thingy without guidance from an experienced agent or agency either.
I say that because To Easy also wrote:
You can always be a dick and do an AOR (Agent of record). If you have that same company the person is currently with and you cannot find a cheaper rate, you can ask them if they would like YOU to be their agent, instead of the other one. All you would have to do is sell your personality and let them gain confidence in you.
That's "Experienced Agent" inside information there.
Posted: Tue Dec 30, 2008 05:12 pm Post Subject:
gary you are correct p&c pays around 10-15% depending on if it's Auto or Home.
Posted: Mon Jan 05, 2009 05:57 pm Post Subject: sell crazy somewhere else
It's still BS and here's why: Any agent on the independent side would know about AOR's on Day 1. Also, most companies don't like doing AORs and it isn't as easy as the poster describes. Secondly, I challenge anyone to get into the large commercial insurance business within 6 months of being licensed, even with your daddy's help. Here's why: If I'm an agent that currently has some large commercial accounts, before renewal time I reopen quotes for this business with other commercial carriers. Most carriers only allow one agent to run the quote with the company, so "first come, first serve." Thereby, I have no just elimanted much of my competition, because even if someone wants to come in and grab it, they can't.
I also call BS because this person says they bought a book of business on his/her own, implying their dad isn't working with them. Now maybe their dad is the person they bought it from and is assisting on the large commercial cases, but that means the dad's book was only $250,000 - in which case I doubt he did hardly any large commercial or his renewals would have been much higher.
Sorry folks, but I've been in this business far too long and heard the dreamings of far too many NEW agents - and that post is almost exactly what they all sound like. Granted, an agent CAN have those accomplishments, but NOT in the first 6 months.
Get a pitchfork for that load of horse dung.
Posted: Mon Jan 05, 2009 06:00 pm Post Subject: correction
Sorry - daddy's book should have been $320,000, not $250,000. Same difference. 99% of the time, the big fish are landed by large agencies, meaning $1,000,000 in commissions or more. You need to be that big to get some of the large carrier appointments as well, which is another reason I call BS.
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