Compensating Personal Lines Producers & Account Managers

By and | May 17, 2021

Personal lines production seems to be a larger focus now for property/casualty agencies today. A question that our clients often ask us is regarding how to compensate personal lines staff for production. The short answer is it depends on the role and the personalities involved.

To simplify the answer, we will focus on sales compensation to a “pure personal lines producer” as well as an account manager that also generates sales. Our definition of a “pure personal lines producer” is someone that takes an active role in generating sales and is not an order taker over the phone. Our definition of a PL account manager is someone that is active in cross-selling personal lines accounts that they service, as well as providing new quotes and closing sales for leads that call in.

Although they are no longer common, personal lines only producers will help an agency grow this department with new accounts with a focus on high-net-worth clients. Most of our clients would do anything to hire an experienced and versatile account manager that understands high-net-worth clients, let alone a personal lines producer that focuses on these large accounts.

Producer Compensation

Producers can be compensated on a salary-only basis, salary plus commissions, or a commission-only basis. The goal is to use compensation to drive motivation for new sales and account retention. If the producer is on a salary-only compensation plan, the agency needs to really track sales to ensure the producer is validating their compensation.

For salary plus commission compensation plans, establishing a motivating first-year commission structure is imperative. If it is a great salary, then there is no need to also pay a renewal commission. That also applies if the producer hands the accounts over to the account manager after the sale for all future service work. If the salary is just a base for the person to get by with, then new and renewal commission makes sense. First-year only in the 50% range is not unusual. If new and renewal commission is needed, then something like 50% new and 20% renewal is acceptable, along with the base.

Account Manager Compensation

It usually is a good idea to use compensation to encourage the service staff to also generate new business. However, in general, the personality that likes to service accounts is often not highly motived to do new business sales, regardless of the compensation. With that said, if the account manager is getting new leads that call in or are referred in, then giving them a first-year only commission for their efforts to land the new accounts is warranted.

There are no “standard” new business compensation plans for account managers. The two most common approaches are a flat dollar amount or a commission percentage. We have seen flat dollar incentives of $25 to $50 per package policy or $10-$25 for single policies. Some agencies give first-year commissions to the PL account managers, which is usually in the 10% to 50% commission range.

To keep it simple, the account manager can keep a new business monthly list that can be given to accounting so as not to complicate the computer records. Management or accounting can spot-check the list for accuracy.

Sometimes, one concern from management is that the account manager could become so focused on generating new business to receiving the incentive that the service of existing accounts could suffer and attrition increase. To adjust for that situation, the new business reward can be based on “net new” (new less lost accounts). This rarely occurs since most agencies do not lose much business and retention rates in the 95% to 98% range are not unusual.

Set Up Outside Referral Relationships

Organic new business sales are not the only method of generating new clients. Having good relationships with outside financial planners, mortgage lenders, CPAs, attorneys, and high-value real estate

agents will help bring in great referrals to independent agents. Those professionals want relationships with excellent insurance agents since that also helps them have satisfied clients. Since they are usually not licensed insurance agents, the referral should be two-ways, or some other non-commission benefits could be set up to maintain the relationship.


Personal lines new business growth is a great way to expand the agency and add to its profitability. The use of compensation plans is often the best way to motivate employees to generate sales. Compensation plans should be customized to best fit the agency’s resources, the talent, and the personality of the employees, as well as the agency’s goals.

Implementing the concepts in this article will assist the agency in getting this growth. If the agency needs a good CSR Incentive compensation plan to cross-sell business for all departments, contact and ask us to email it to you.

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Insurance Journal West May 17, 2021
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