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Producer renewals?
Posted: Sat Jul 29, 2006 9:17 am
by DFresh
I would be interested to know how many of you guys pay your producers renewals. I am about to hire my first producer and am trying to decide how I should pay him/her, any ideas would be greatly appreciated.
Posted: Mon Jul 31, 2006 5:34 am
by Big Dog
Normal procedure is to pay a higher percentage of commission for actual new business written, and then a lower percentage on renewals. The thing is that you want the producer to do their best to help retain the renewals as the up front costs to bring in a new piece of business are high.
Posted: Mon Jul 31, 2006 11:34 am
by CATHIEA
It really depends on the situation. If you're providing a csr to service the account then generally the commission is lower on renewals - 60-40 split on new can go as low as 75-25 on renewal. If you're expecting the producer to service their own book then you need to keep the new & renewal at the same level or you won't retain the business. There really isn't some magic formula out there. Every agency has to determine what the business and producer is worth to them. The agency has to cover their costs but don't loose sight that the producer has to earn a living. Comission splits have to be a win-win.