Insurance Journal Forums

Hello!
I own small agency, and my helper just got her license. She is my first producer.
She gets hourly pay and we decided on 30% commission on new business, and no commission for renewals. BUT i don't know, how other agents usually handle endorsements? Pay commissions on endorsements or not? Thanks for the advice!

I would say that in a two person shop such as yours, the decision would come down to account 'ownership'. If the policy was the producer's from inception and the relationship began with producer initiative, then I'd pay endorsement commission (and claw back on return premium endorsements) for the account on an ongoing basis if it generates new premium...after all, you're not paying renewal commission.

The owner/producer commission/wage relationship in a very small agency such as yours has both formal and informal rules for compensation, and in the interest of promoting the use of the license for a new producer who also happens to have some legacy in the agency, I would err on the side of generosity.

Thanks for the reply!

I would encourage some form of compensation for new lines of coverage. IE: If there is a client that adds an auto, that in an endorsement. But what if your employee says, "Hey customer, as you add the new auto, it increases your liability exposure... have you ever considered adding an Umbrella?" Then if they sell the umbrella, that is a new policy. That is a clear example. But what if, the client calls to increase the Business Personal Property Limits. What if your employee uses that opprotunity to discuss other property items, as a result the employee identifies other property items, and as a result, the insured adds a new inland marine policy section to the package policy. You may wish to compensate your employee for adding the new line of coverage.