Insurance Journal Forums

Hi Everyone.

I'm an avid reader of this forum, but have never posted a topic before until now.

I've been at my current agency working as a large commercial AM (for my agency, large commercial is 100k in premium or more) for 3 years and have recently been given the opportunity to transition into a producer role.

First a quick bit about me: I'm 25 with a degree in economics and only have 3 years in this business. My current salary is great, and I have been given yearly inflation-based raises to help keep up with the cost of living. I'm single and have no children, no mortgage, and minimal bills.

My question is less about advice for starting a book, and more about the longterm. Right now I make plenty of money to support my current lifestyle, but longterm I'm going to have to do something to increase my income. Like I said above I don't have many bills or obligations at the moment, so I feel this may be a great time to start building a book.

My agency is looking for someone to write more large commercial, and I have seen first hand the difficulties in breaking into this market and writing new business (writing a 100k account is much more difficult than a $500 BOP). That being said I have also seen the significant commissions that can be generated by chasing this level of premium.

We're a niche agency that has developed a trusted name in our small, but profitable industry (we write insurance in the environmental market). We've got access to great markets and brokers, and for the most part the table is all set up... It's just up to me whether or not I sit down for dinner, so to speak.

Does anyone have any advice for me in making this decision? If hard numbers help I make a salary now of about 54,000.

Salary doesn't matter.
What matters is your unique ability. The first question to ask is: What is your unique ability?
Unique ability is a combination of your talent, the passion you have for using it, and the incredible value it creates for others. There are no tests for these abilities, and they’re not taught in school, but they’re still extremely valuable in the right situations.
When you’re focused on your Unique Ability, your clients and customers will benefit from your increased ability to create solutions for them, and they’ll also experience a secondary benefit: the surge of energy that comes from being around someone who’s doing what they’re talented at and love doing most.
So before I'd jump to a response w/o knowing a thing about you, I'd reseach and suggest you find more about yourself and your unique ability. Google search for some articles on this.
Then find a position within your company or elsewhere where you can work 80% of your time working within your unique ability. In the long run, you'll be much happier and "richer" in what you do. Sales, and sales related requirements may conflict with your unique ability, and could make you miserable- more money or not.
Food for thought,
TF

Your salary potential will increase tenfold by switching to a sales role - and you will someday work only for yourself, which is a bigger reward. Try it out now, before you have commitments (wife, kids, mortgage) that could prevent you from taking the plunge. Just know the risks involved, including a loss of stable salary. Learn to make the months when you receive a $20k check last through the months where you get $0.

Finally, be prepared to write off the first six months. It takes that amount of time to gain any traction, get in front of folks before their x-date, applications, etc.

If you have the intestinal fortitude to sell, now is the best time for you to try it. Good luck!

I have seen many successful mid-market and large market AM's move successfully into producer roles because of their understanding of how an account must be managed properly after it is converted from a prospect to a client. So for producers engaged in either consultative selling or institutional selling where the sales process is really diagnosing how an account is managed by the incumbent, and how you would manage it differently and why - this is a good fit. I have seen less success in AM's moving to production slots in the small market where there is more commoditization to the process and therefore places a bit more weight on the front end sales skills and prospecting skills.

So based on the information you provided about account size, your firm, it's niche, etc., I'd say your move has a high chance of success for an AM to producer transition. I also compliment you on thinking about your career path and next steps - but if your only desire in becoming a producer is more income - you may find yourself needing more motivation, or reason, than that when 'the dark shadows' fall upon you during sales cycle dips, gaps in production, etc., which every producer experiences over time. I would really suggest interviewing a number of veteran producers and asking them what they get out of it, personally and professionally, to perhaps find an additional reason/motivation for this transition before you embark upon it.

You can also make a good coin in account management. I know a lot of great Account Executives making in the $125k to $150k + bonus range - albeit they have 10+ years or more of experience. So I would encourage you not to dismiss the career path of an AM/SAM/AE or whatever you want to call it based on the perception that you can't make good money doing account management work. You can.

I would encourage you to establish a crystal clear understanding of how you will be paid as a producer. Know your comp plan inside and out. Develop a producer cash flow (I can give you a template we provide our clients if you wish) that reconciles your comp against different rates of production, revenue lag forwards, new vs. renewal income, how different retention rates will impact your book over time, how staffing will be allocated to you based on different incremental sizes of your book as you are growing it, etc. This will help give you and whoever you are talking to about this position a clear understanding of what happens if you meet expectations, exceed them, or fall below them. Going into this with your eyes open is key.

There's a lot to this, but I think the above might help you with at least doing a little more prelim work interviewing producers, finding additional reasons to do this above and beyond just money, and engaging in a conversation as it relates to comp and production expectations.

Good luck - it's a great journey for many insurance professionals.

Have you checked out in today's IJ newsletter headline under "My New Markets"? It's titled:

"New Training Series Grooms Insurance Agents for Ownership, Management"

It appears to be an on-line course. Sounds like this is a place where you can start.

Good luck!!