I am starting with an independent insurance firm as a producer and have a question about the commission split?

I am about to start a career as a producer for an independent insurance agency and I was wondering if a 60/40 split on all new buisness ( 60 to me 40 to them ) is average and my renewals drop down to 20/ 80 (20 to me 80 to them ) each year following for as long as i work there, if that is average. If someone could please give me some helpful insight it would be greatly appreciated. Thank you I am starting with an independent insurance firm as a producer and have a question about the commission split?
It is like everything else in business: it is negotiable. The split you receive can often depend on who is responsible for paying other expenses such as telephone, advertising, rent, office supplies and salaries for administrative personnel. In the past, I have negotiated agreements where I would receive up to 80%, but I was an ';independent contractor'; and was responsible for all of my own expenses (except errors and omissions insurance). The lowest split I have received was a 50/50 split with the contracting producer receiving any broker fees.





My opinion would be that the initial split sounds fair if they are paying the overhead expenses, but the renewal split seems a bit unfair to me.





Good luck in your career!I am starting with an independent insurance firm as a producer and have a question about the commission split?
You don't give enough information to give you a definitive answer.





At least two things must be taken into account. What arrangement do you have for expenses? Second what level of support is the agency providing?





If the agency is paying for car expenses and employee benefits and has a CSR to handle marketing the accounts that you bring as well as servicing the renewals then the split is very generous (maybe more than generous). On the other hand if you are, in essence, an independent contractor who has to pay all of your own expenses and service your own accounts then the split is perhaps somewhat low.





The other thing that you need to take into consideration is who owns the account that you produce? Is there any plan in place so that you can share in the ownership of the account?
As long as they are doing all the servicing on the renewal policies, it's fair. If you have to do ANY servicing of the renewals, it would be more fair for renewals to be 40/60.





Renewals are NEVER as high as the initial year, as you need the encouragement to get out there and keep producing.
I would recommend that if you can procure your own clients and cases you work independently of any captive firm. Several companies can pay you up to 100-105% of annual premium. you should work with an imo-this way you get top commission, they run quotes/send forms/process new business, and you still get top compensation- for more ...www.carylevinson.com joseph@carylevinson.com