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Insurance companies gouging agents.

Posted: Fri Jul 31, 2015 2:20 pm
by Capitalismworks
Has anyone else noticed how some companies are gouging agent commissions?
This only applies to California
MetLife pays lower than the norm for the market yet wants only preferred business? Home rates are expensive and limited to earthquake areas
Travelers has lowered its commissions 3% on auto and home for their "new product rollout" and it is not that competitive.
Kemper, lower commissions for teenage drivers listed on the policy, yet they tout the most profitable year ever?
I dropped MetLife,
I will be dropping Travelers (they pay as earned on commissions as well).
Kemper gets none of my family with teenager business, so they get a pass.
It seems to me Mercury is the only company with any integrity to the independent agent pipeline. They pay well and fast and offer a very competitive product.
I am looking at Safeco and GuideOne to replace Travelers and MetLife any Ideas? :?:

Re: Insurance companies gouging agents.

Posted: Mon Aug 03, 2015 10:35 am
by d's insurance store
Your only action is to be nimble in the marketplace and take full advantage of your independent status and thank your lucky stars you're not a captive. Use your comparative rater to figure out who might be more competitive in the risk categories you're exposed to and pursue other appointments.

None of us have heavenly rights to agency success and sometimes the carriers we perceive we were loyal to and attentive to just turn around for corporate reasons and stab us in the back. You can vote with your rater.

And, don't be blinded by what you perceive as Mercury's loyalty to its agency force. They too are fully capable of deciding in the board room one day to feather their own nests at the expense of agencies affiliated with them. Just chat with current Mercury agency owner's who are enduring new auto and property/home rates in California and see how happy they are with new circumstances.

Re: Insurance companies gouging agents.

Posted: Mon Aug 03, 2015 11:10 am
by ziiqui
MetLife and Travelers can go take a hike! Kemper is my go-to company here in Cali. Excellent rates, service (agent & client), commissions, and promotions!

Re: Insurance companies gouging agents.

Posted: Mon Aug 03, 2015 5:15 pm
by agent14
ziiqui, D's speaks the truth. Don't be married to any of them. Any one of them could turn on you at a moment's notice. Look what Travelers did recently.

Vote with your rater, and try to not become too big with any one carrier. Becoming too big with any one carrier, compared with the rest of your carriers, will give the carrier too much leverage.

Re: Insurance companies gouging agents.

Posted: Tue Aug 04, 2015 9:08 pm
by yoyowordup
Find a nice regional carrier that wants to actually be a partner with its agents. Cincinnati Insurance and Auto-Owners have both publicly stated that they will NOT compete against their own agents. No direct channels, independent agents only.

I don't think AO is in CA yet, and Cincinnati is heading there in personal lines in the near future. If you haven't heard of Cincinnati Insurance you should call them. They are EXCELLENT!

Re: Insurance companies gouging agents.

Posted: Wed Aug 05, 2015 7:09 am
by Secure Ins Group
Capitalismworks wrote:Has anyone else noticed how some companies are gouging agent commissions?
This only applies to California
MetLife pays lower than the norm for the market yet wants only preferred business? Home rates are expensive and limited to earthquake areas
Travelers has lowered its commissions 3% on auto and home for their "new product rollout" and it is not that competitive.
Kemper, lower commissions for teenage drivers listed on the policy, yet they tout the most profitable year ever?
I dropped MetLife,
I will be dropping Travelers (they pay as earned on commissions as well).
Kemper gets none of my family with teenager business, so they get a pass.
It seems to me Mercury is the only company with any integrity to the independent agent pipeline. They pay well and fast and offer a very competitive product.
I am looking at Safeco and GuideOne to replace Travelers and MetLife any Ideas? :?:

Hi "Capitalismworks",

I wish I could say this was the first instance of the type of behavior your describing from your carriers, but unfortunately it isn't. Always being ready to adjust to the market is a must! Since it sounds like you are primarily in the P and C world, a couple of places which may be of help are appund.com and siaa.net. They have a vast array of carriers and can tell you who is the most competitive is your desired locale...Hope this helps!

Stay Well,

Rick

Re: Insurance companies gouging agents.

Posted: Wed Aug 05, 2015 2:32 pm
by yoyowordup
www.appund.com sucks and would pay even less commission than any direct appointment. How would that help?

Re: Insurance companies gouging agents.

Posted: Fri Aug 07, 2015 10:33 am
by d's insurance store
yoyowordup wrote:http://www.appund.com sucks and would pay even less commission than any direct appointment. How would that help?
MGA's and cluster groups can only realistically be used to fill isolated gaps where direct appointments are non existent.

I think those of us who've been around for decades tend to forget that anyone stupid enough to start out in the P&C Personal Lines marketplace as a scratch start-up is probably desperate for any revenue nibble possible and working for 8% is better than not working at all.

I firmly believe that one cannot run an agency properly below 10% commission and for those in dire straights who don't have the legacy renewal revenue stream, reaching for low revenue accounts is just delaying the inevitable outcome of either hand to mouth existence or ultimate business failure.

I've pontificated before on this site about my own pessimism for a personal lines, or general practice small or medium sized agency in the coming years. When carriers mess with us for their own financial enhancement just because they can, that further amplifies my thesis for a failing, diminished business model...maybe not next year or over the next 5 years, but not much longer than that. Gawd, I'm glad I'm the age I am...

Re: Insurance companies gouging agents.

Posted: Mon Aug 10, 2015 11:01 am
by Smalltownagent
D's insurance store...at least you have motivational speaking as a natural talent once our industry fails. :wink:

I do agree with your comments though, its important to align yourself with the companies that value our work (for the time being, because it can change in a heartbeat). Like yoyowordup mentioned, find yourself a small regional carrier. Our biggest carrier by volume is a small regional carrier (TX only) that we don't ever *knocking on wood* have to worry about competing against directly. They might cut commissions, or profit sharing, or a multitude of other ways...but I don't foresee them ever having the capability to sell directly.

Re: Insurance companies gouging agents.

Posted: Tue Aug 11, 2015 10:31 am
by d's insurance store
Smalltownagent wrote:D's insurance store...at least you have motivational speaking as a natural talent once our industry fails. :wink:

I do agree with your comments though, its important to align yourself with the companies that value our work (for the time being, because it can change in a heartbeat). Like yoyowordup mentioned, find yourself a small regional carrier. Our biggest carrier by volume is a small regional carrier (TX only) that we don't ever *knocking on wood* have to worry about competing against directly. They might cut commissions, or profit sharing, or a multitude of other ways...but I don't foresee them ever having the capability to sell directly.
I've been affiliated/appointed with a number of carriers over the years that attempted the direct channel in addition to maintaining the agency connection as well. SAFECO, Unitrin, Arrowhead and Mercury come to mind. In each instance, at least in my opinion, the point of sale underwriting failed miserably and volume was so low that each carrier had to modify or even scrap its attempt to circumvent the retail agency.

So, the desire to cut out agency commission expense exists, but the process and procedure to mimic GEICO and Progressive direct just isn't there.

My short list of reasons why I think the current business model is dying for the small & mid sized retail agency are lack of perceived value in dealing with an agency, rates, a generation raised on technology that can and will access on line vendors of personal lines insurance and ultimately an introduction of self driving cars. Carriers pile on with diminishing commissions, forced agency increased expenses and servicing and just a general lack of appreciation for the field work done on the carrier's behalf.

My agency bank account still fills up each month with legacy commissions, so I'm not immediately going anywhere, but once that checking account dipstick starts to show lower levels of revenue, I'll be ready to make the graceful exit.