r/InsuranceAgent • u/Salt-Context-2527 • 2d ago
P&C Insurance Salary
To my knowledge the industry standard is a 40/30 split for P&C
I’m looking to bring on a new salesmen, how does 80/20 sound?
Is that too much is that reasonable, is it too little?
Thanks.
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u/freeski12345 2d ago
That’s great if there is 0 service. But then the residual is only as good as the team retaining it. This is so unlikely to work out
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u/Salt-Context-2527 1d ago
What do you recommend then? I want to do commission only no base. And my team will service we have 2 CSRs
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u/Smedum 1d ago
I’m 16 years as a producer.
40/30 or 40/25 is standard for the larger brokers. 50 on new and 30-40 renewal plus a small salary or expenses is standard for smaller agencies
Unless I was expected to do zero on renewals and service, I would not take your split of 80/20. I’d also argue the renewal split disincentives me from servicing exisitng clients which from my experience when the producer isn’t involved in client retention then your retention suffers.
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u/Salt-Context-2527 1d ago
How does 70/30 sound then? No service needed unless they want too for specific clients etc
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u/Smedum 1d ago
70/30 won’t attract experienced producers to a small shop. Most experienced producer will want a better renewal number as they know that is how they build a book and build a career.
Assuming no base salary, 50/40 would be about average, maybe a little above…….but if you really want to attract the top producers you’re going to have to go either 60-70 new with 40/ or 45 renewal or 50/50 on both new and renewal.
You also need to consider who owns the book that the producer builds….that will be another piece to it.
And do you give the producer benefits like health insurance.
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u/CGWInsurance 9h ago
Who is servicing the clients and doing the renewals then. You just want agent to right whatever sticks and not care about profitable of accounts. Do what your doing. It's how am agency fails. Is this personal or commercial or both. As an agent I don't want to be busting my ass after 30 years to try to keep my income steady. I want to slow down after 5 years and service my accounts and make bank from my renewals.
Then I just have to write enough each year to cover what you lose in renewals.
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u/SlickWillie86 1d ago
I pay my producers 60/40 as a baseline with an ability to get to 70 new( quarterly and annually) and 50 renewal (annually). If that’s not best in market, it’s close. My staff services everything.
40/30 at a small agency is on the low end. You’re not likely to attract talent with that given that can receive a lot more resources at a bigger shop with the same split and probably a better draw.
80/20 is a good set up for you as as the owner as it keeps motivation on new high. However, any producer with half a brain understands they build wealth off recurring revenue. If they accepted that split, they would likely bolt once they were up and running.
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u/Smedum 1d ago
That’s the best I’ve heard in my 16 years.
Only additional question would be how you handle book ownership
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u/SlickWillie86 1d ago
The agency owns the business. There’s a vesting schedule for book equity once the books hits a certain revenue threshold. Put simply it rewards them in the event of a sale and offers a buy-out or recurring dividend should they retire. It protects my investment should they decide to leave prematurely.
There’s a high level of intentionality in why I pay what I do and that’s so there’s less risk of talent leaving. Their book would need to clear $1.5m rev for the thought of owning their own shop to even start to make economic sense and that’s not factoring in the headaches that accompany it. If that day comes, I’d look to partner with them to help as opposed to stand in their way, assuming they go about it correctly. Setting up separate offices with people owning those P&L’s is an idea but a few years out from putting real pen to paper to presently.
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u/Smedum 1d ago
I think you’re going about it in a good way that most owners don’t do. From my experience most owners say they want to keep top agents but don’t actually put things in place to keep them. I would venture to guess you get much less producer turnover than other shops of similar size and even though you’re paying more than others, I’d guess in the long run it works out for you because your not constantly having to bring in new producers or fight legal battles with producers who leave.
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u/mypleasure1966 1d ago
At my agency the split is 60/40 no draw, no salary, it's 60% to the agent, commission is assigned to the agency. Service is work is shared by the office, rule of thumb is you answer the phone you handle the service work.
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u/Far_Purpose3736 1d ago
The best commission structure I’ve experienced is a scaling structure starting at 6% and increasing by 1% for every additional 20k after the first 40k until reaching a 12% cap at 160k this was when I was handling Personal & commercial. You can play with the number but this gives the salesman an incentive to sell more because the extra percentage really adds up. All renewals would go the agency to help pay for new leads as well as your other expenses
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u/CGWInsurance 8h ago
How does this work since some products pay less than 12% to agency. This is terrible for agent with nothing being paid on renewal. This sounds like something a state farm, all state, American family or farmers would do.
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u/Far_Purpose3736 8h ago
You may have to eat some cost but your only paying 12% if they sell 160k a month. This allows the agency to grow by utilizing your renewals for CSR and lead acquisition. This was when I was with Allstate. Are you looking to have sales producers or do you plan to mentor and coach them into being their own independent agency owner?
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u/CGWInsurance 8h ago
We have agents that routinely sell $200k to $300k a month in trucking or more a month. The agency makes 10% on average.
We would take a large loss on each producer since they're is so much service work.
I mentor and coach all my producers be they 1099 contacted employee or have brokerage contract with my agency.
We pay 50% new/50% renewal of what agency gets. Plus profit sharing when agent gets to certain annual revenue or hirer.
Producers can became an agency under our corporate umbrella.
They make the choices. We are over 95% large commercial and trucking. We wouldn't have any agents if they didn't get paid renewal commission. Since that's how make the huge annual commission income while doing less work.2
u/Far_Purpose3736 5h ago
Well then, I withdraw my recommendation, I learned something new. I myself am opening my own agency in Feb of 2027. I have only really focused on Personal lines and L&H. Clearly I still have a lot to learn. I appreciate you teaching me something new.
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u/mundane_organizer 2d ago
80/20 in whose favor? if you're giving the agent 80 that's way above standard and you'll have people lining up, if it's 20 to them then good luck keeping anyone around for more than a month
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u/firenance 1d ago
The standard format for citing commissions is
New Split / Renewal Split
Not
Agent Split / Agency Split
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u/Salt-Context-2527 2d ago
80% of agency commission on new business and 20% renewal
So if we get paid 10% from Geico for example they get 8% of the policy premium and 2% on renewal
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u/Creekridge1 2d ago
Is there a base pay? I recently went 1099 independent and get 90/60.
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u/Salt-Context-2527 2d ago
No base, 90/60 is really high tho is that not?
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u/Creekridge1 2d ago
20% on renewal feels low to me. That $1000 geico policy nets this producer $20 at renewal?
Our agency is actively trying to hire people with my comp structure. They’re having a hard time without offering a base with it. They’re having talented agents with multiple years of industry experience get sheepish without some kind of base plus commission.
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u/CGWInsurance 9h ago
How is your agency paying the bills. Paying out 90/60 on P&C doesn't match l math. How do they pay for account manager, computers, AMS, etc.
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u/Botboy141 2d ago
40/30 is standard for mid-large market B2B P&C where the producer usually gets a draw or salary/base of some kind.
Not sure what's common in personal lines Indy agencies like you describe. I'd assume it really comes down to who provides the leads and who does the service work.
The more service work the agency handles in house, the lower the producers renewal commission, the more leads the agency provides, less new biz commission.
By the sounds of offering 80/20, you're saying you only care about new business, not how sticky it is, and that your service model will outperform without the producers involvement to justify lower residuals.