by Ed Hamilton Agency » Thu Jan 29, 2009 04:37 am
I am looking at hiring a new producer at a 10% commission based on Premium sold. He wants to open is own location where he lives. Fine by me , but can he make it with rent and bills if I am paying him 10 %? He will sell mostly P&C with some health and life.
Thoughts ? any one ever do this?
Thoughts ? any one ever do this?
Posted: Thu Jan 29, 2009 11:35 am Post Subject:
HI Ed, The agents of this board will soon be around with their suggestions. But one thing is certain that if you offer commission that is not at per with the market rates, you'll not get agents to work for you.
Posted: Thu Jan 29, 2009 12:45 pm Post Subject:
I am looking at hiring a new producer at a 10% commission based on Premium sold. He wants to open is own location where he lives. Fine by me , but can he make it with rent and bills if I am paying him 10 %? He will sell mostly P&C with some health and life.
Most of the P&C carriers with whom I have worked, pay a new business commission of around 12% to 15%. If you pay 10%, you get to keep around 2%. That means if your new agent sells an $800 home insurance policy, he/she makes $96.00 and you make $16.00. It will take a large amount of premium for either one of you to make any money.
Would it not be better for your new agents to focus on the life and health side and you write the P&C. A good life contract will pay 100% or greater commission. If your agent sells an $800 life insurance policy, he/she will make about $800.
I just don't think you will find a good agent to get very excited about 10% commission.
Posted: Mon Feb 02, 2009 01:46 am Post Subject:
I am looking at hiring a new producer at a 10% commission based on Premium sold.
10% is a solid contract for a P&C producer. But, he won't make it if that is all he has, especially if he is paying office expenses. Surely you will pay more for life and health? 70-80%? You can teach him to sell that to support himself and eventually cross sell his way to a P&C book.
Posted: Wed Mar 11, 2009 03:32 am Post Subject:
I absolutely agree...Unless he sells some Life and Health the overhead will eat up any profits for the first few years!
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