I have an opportunity to enter into a marketing agreement with an established independent agency. I am going to list as follows the circumstances, info about me, the agency and details of the agreement. I would like opinions from you experienced agents, and MGAS in regards to if this is a fair and equitable agreement.
About me.....I have been licensed in life and health since 1983, operated a one man s-corp for 10 yrs that focused on a niche payroll market I developed in which I marketed term and UL, short term disabilty, and cancer/icu coverage. After which I worked for 5 years as a financial services rep with a major ins co, obtained my 6 and 63 securities licenses , as well as P & C.
I never did much P & C business while a financial services rep. However, my last year was spent working for primarily a P&C agency, where for the first time I begin to learn and market in the commercial side of P & C. I left that firm 3 months ago and where I'm at presently is basically...experienced and confident at developing and driving small to medium sized commercial accounts via phone cold call and B2B in person, ok with simple BOP coverages, still on a learning curve with
larger, more complex, WComp, GL, and surplus lines cases.
About the agency.....basically a independent focused on primarily personal lines P & C, established in larger metro area for 20 yrs...though focused on personal...has good existing contracts with solid carriers...both for personal and commercial.....good set up with surplus lines sources when I need them. What they are looking for is basically added income from production of 1099 agents that they can partner with.
About the commission split.....this is straight commission btw...no benefits, salary, etc., straight 1099 contractor . . My first yr commission split is 70% of total first yr. commission,and 50% of the renewals thereafter. Same commission on rewrites if I do it, or I get 25% if the agency does it. I can buy out my book and leave when ever I choose, by paying 25% of whatever the annual COMMISSION (not premium) is when I leave. I don't have to come up with a lump amount of the 25%, we can work out a % of the book deducted monthly till the 25 % is reached or split off 25% of the policies to the compensate the agency. Bottomline is ...I have an opportunity to own my book as I develop it and take it with me if I leave.
I have to service my book...for example, commercial accounts needing certificates...I have to handle. I will have to handle most all of my marketing expenses, the agency will provide a place to work, a desk, computer, access via internet to all the carriers' systems, access to ams 360, detailed commission statements, etc., etc.
What do you think? I am simply looking for a place where I can continue my development of my knowledge of the commercial side of the P&C business, and work on the personal as well, have automony, and build a business that I can stay put where it is at if I choose, or go in another direction and have something to show for all my hard work after perhaps years...if I so decide to. Please ask me any questions/ additional info.. you may have. Thanks in advance for your opinions and comments.