New producers
Moderators: Josh, independent guy
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new2independent
- Insurance Journal Addict
- Posts: 33
- Joined: Fri Nov 21, 2008 4:20 pm
New producers
What are agency owners doing for new producers to help ensure their success in this economy?
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Shagster12
- Insurance Journal Addict
- Posts: 78
- Joined: Mon Feb 04, 2008 11:44 am
Re: New producers
Here's what I've seen that I think works the best.
The principle will assign a 'service' book of business from the existing agency pool for the new producer to "Service and cross sell".
The book is established based on a set revenue amount it will generate for the producer and this becomes their draw amount with additional income available for new business production.
Example: Presume you're going to start a new producer on a $50,000 a year draw basis. You would develop a book of business based on say 25% commission to the producer of appx. $1,800,000 to service. Based on an average agency commission of 11% this would translate to $49,500 commission to the producer. On top of that you pay 35-40% on new business and they're off to the races! This is positioned for 2 years so the new producer has a fair starting income with time to grow their own book without being panicked every month, and the agency will benefit at the end by reassuming the book including any lines that were cross sold. The producer then has two years in which to grow their personal book and will have that as a base at the end of the two year service cycle.
I think this is a very reasonable and exuitable position for both parties. The new producer doesn't have to starve or panic while they grow their book, and the agency gains by 1) taking the burden of servicing this book from the principle, 2) Gaining any cross sells, 3) It provides built in training for a new producer...
Well there's my two cents worth.
Shagster
The principle will assign a 'service' book of business from the existing agency pool for the new producer to "Service and cross sell".
The book is established based on a set revenue amount it will generate for the producer and this becomes their draw amount with additional income available for new business production.
Example: Presume you're going to start a new producer on a $50,000 a year draw basis. You would develop a book of business based on say 25% commission to the producer of appx. $1,800,000 to service. Based on an average agency commission of 11% this would translate to $49,500 commission to the producer. On top of that you pay 35-40% on new business and they're off to the races! This is positioned for 2 years so the new producer has a fair starting income with time to grow their own book without being panicked every month, and the agency will benefit at the end by reassuming the book including any lines that were cross sold. The producer then has two years in which to grow their personal book and will have that as a base at the end of the two year service cycle.
I think this is a very reasonable and exuitable position for both parties. The new producer doesn't have to starve or panic while they grow their book, and the agency gains by 1) taking the burden of servicing this book from the principle, 2) Gaining any cross sells, 3) It provides built in training for a new producer...
Well there's my two cents worth.
Shagster
Re: New producers
Are New Producers being hired right now? Do we have anyone in management that can comment on this?
Re: New producers
I always tell my new producers (and old timers also) they have to specialize in an industry and go after it exclusively. Yes it may take a little more time (around 2 years) to get your name out there but later on you will be working less and making more. I've found the shotgun/jack-of-all-trades/know it all agent approach to be counterproductive.