My agent’s contract is ending, and the corporation would want me to take over.
30% commission on all new business; no basic salary; no renewal. They do offer benefits—a pathetic 401k match, excellent dentistry and eye care, for example—but I don’t use their health plan because my spouse’s employer covers our premium for a better option.
I’ve been handling the $6 million book on my own, but if I accept this role, they will pay someone to handle the servicing.
How would you respond?
It’s not your book if you’re not receiving renewals. You’re only being compensated to sell garbage.
What aggravates me the most is that. Due to my agent’s departure, I have been working on this book for the last two years in addition to writing a little amount of business. He personally gives me a 10% new and renewal commission on top of my basic pay (writing on my own was difficult when handling a book this size, largely P&C).
I’ll take 50% on renewals and 30% on new ones. If not, f em
require a share of the renewals, if not more.
Which percentage would make you happy?
Not a chance. As a broker in California for ten years, I would think that the minimum commission on new business should be 40% and the renewal rate should be around 25%. This is prior to incentive bonuses, which ought to raise it. I’ve noticed a 30% increase overall, which is also advantageous because your renewal book will be larger. You should never oversee renewals if you aren’t compensated to do so. If you would want to PM me to discuss this more, I’d be happy to do so, but please don’t do so unless I’m missing any information.