Agent Compensation
Moderators: Josh, independent guy
Agent Compensation
What is average agent compensation for a p&c agent?
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independent guy
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That's actually a broad question...
Agency income: Commissions that our companies offer go from 9% to 20%. Many have growth and profitability based continent commissions. We also have agency fees that we charge that contribute to the bottom line. Some non-insurance products we sell pay 30 - 35% commission, but they're relatively small things... Like separate roadside assistance memberships.
As for agents, there are many different ways they can be compensated, but for the most part they're paid a part of the sales commission and possibly some base pay. Any pay arrangement is going to be set up between the agent and the employer.
Agency income: Commissions that our companies offer go from 9% to 20%. Many have growth and profitability based continent commissions. We also have agency fees that we charge that contribute to the bottom line. Some non-insurance products we sell pay 30 - 35% commission, but they're relatively small things... Like separate roadside assistance memberships.
As for agents, there are many different ways they can be compensated, but for the most part they're paid a part of the sales commission and possibly some base pay. Any pay arrangement is going to be set up between the agent and the employer.
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jctwindad
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The national averages on Producer Compensation are around 40% of the agency commission (You can get these numbers through a number of studies, the best one done by the Society of CIC in Austin, Texas). Most agencies pay a higher commission for new business, and lower for renewals, so you often find around 50% new business, and 30% renewal. Much of this depends on the support provided to a Producer (CSR, Marketing assistance, Claim assistance, etc.); and other items provided to Producer, such as Health insurance, E & O insurance, etc. An agency that pays a Producer more than this cannot afford to provide much support at all and make a profit.
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Insurance101
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I would agree with the previous post. On average a producer in an Agency will get between 40% and 50% new and 25%-35% renewal. As mentioned in the prior post it depends on the support, benefits, etc... given to the producer. We also offer a bonus program in addition to commissions, for reaching certain growth goals. (not just new production, but overall growth of the producers book - if they write alot of new business but suffer from retention issues, they will not get a bonus - need to show growth).
I've seen some agencies pay 50% new and 50% renewal and the producer does absolutely nothing to help service the business. This is a recipe for disaster if an agency makes a habit of this.
I've seen some agencies pay 50% new and 50% renewal and the producer does absolutely nothing to help service the business. This is a recipe for disaster if an agency makes a habit of this.
agent comp
I agree with the other posts...
We pay 50% new and 30% renewals for Commercial. Our Commercial producer also does most of her own CSR stuff as we are a small agency. She gets a good salary for handling the CSR work as well as handling the accounts I had prior to hiring her ("house accounts").
Personal lines producers also get a salary along with 30% on new policies. Nothing on renewals.
The whole group gets a strong 401-k match as well as medical premiums paid in full, vacations, the works.
I figure that a piece of business needs to be on the books for over 2 years before I really start to show a profit, after calculating the costs of acquisition.
Swymmer
We pay 50% new and 30% renewals for Commercial. Our Commercial producer also does most of her own CSR stuff as we are a small agency. She gets a good salary for handling the CSR work as well as handling the accounts I had prior to hiring her ("house accounts").
Personal lines producers also get a salary along with 30% on new policies. Nothing on renewals.
The whole group gets a strong 401-k match as well as medical premiums paid in full, vacations, the works.
I figure that a piece of business needs to be on the books for over 2 years before I really start to show a profit, after calculating the costs of acquisition.
Swymmer