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... that could be used to meet my friend's challenge. On a practical level, however, they were overkill. The addition to his my friend's home is beautiful. He had found local craftsmen and artisans to build a den and master bedroom suite that would rival any such additions by the biggest, and best international contractor. My wheels were starting to turn. He could have found and could have afforded such a mega-contractor, but he didn't. He will end up with a better addition, more control over the process and results, and more personal satisfaction by completing this project with local talent — people who understand and appreciate a screen porch, coffee, a rocking chair, and a Lab. My mind was racing. The answer to his business dilemma was not in the pages of any ... . To convert his challenge to the vernacular - when you are up to your ass in alligators, it's tough to remember your original challenge is to drain the swamp. We were sitting on his back porch. My friend had to meet with a contractor to discuss a major addition to his home. I had time to do what I do best - not think but observe. His is a modest house sitting on a beautiful, tree filled lot. My only companion during his absence was his dog, Mollie Deux. She's a yellow Lab or maybe a Lab Lite — Lab genes in a Heinz 57 mix of blood. She certainly is well fit for his big yard. A Chihuahua would probably be snake food. Birds were singing and mosquito hawks were performing aerial acrobatics not 20 feet in ...

... the financial crisis of 2008 temporarily reduced agency values. Some, but not all, agencies eventually bounced back. Another financial crisis is certainly possible, and the effects cannot be fully predicted. Taxes can have a significant effect on agency value. Higher taxes mean a buyer will have fewer dollars left over to pay the seller. When sellers get to keep less money from what they bought they can't afford to pay as much for it in the first place. Regulatory change can also affect agency value. An extreme example would health care reform. Under the law as currently written, the future role and compensation expected to be received by agencies in the health care arena in the future is quite uncertain. The value of a typical agency's health care book of business has fallen as a result. ... closely held businesses. This chapter focuses strictly on special factors that can affect agency value, many of which are unique to insurance agencies. Agency owners should be aware that even the best CPA or business appraiser is unlikely to be aware of these factors unless you, the agency owner, make a point of explaining them. It's Not That Simple! We all know that although the value of a house is ultimately based on what the buyer and seller agree upon, we also know that a reasonable starting place is often the price for which similar homes in the neighborhood have recently sold. We also know a realtor can greatly simplify the process. This might seem difficult to some, especially those who have never bought or sold a house before, but it's child's play compared to valuing an agency ...

... where the salespeople handle everything. Likewise, in agencies where there is little or no house' business to cover basic overhead, the percentage that goes to the producers will have to be lower. To determine what is fair compensation to the sales force in your agency, subtract your targeted profit margin and the cost of operations from agency revenues. What's left over will be the amount that you can afford to pay to the producers. Agencies that provide the standard' level of support, have about 20% of their revenues from house business, and those that want a 15% profit margin will find that the overall percentage that they can pay to producers will be in a range from 27% to 33% of commissions. The level of employee benefits and travel/entertainment/auto expenses ... . This is why the compensation will differ from one agency to the next and in many cases from one producer to the next within the same agency. In situations where the agency provides a high level of support, the producer's percentage will have to be 10 to 15 points less than it is in an agency where the salespeople handle everything. Likewise, in agencies where there is little or no house' business to cover basic overhead, the percentage that goes to the producers will have to be lower. To determine what is fair compensation to the sales force in your agency, subtract your targeted profit margin and the cost of operations from agency revenues. What's left over will be the amount that you can afford to pay to the producers. Agencies that provide the standard' level of support ...

... period of time. Coverage decreases in relation to the insured's build-up of equity in the property mortgaged. In other words, as the insured's covered obligation to the lender decreases, so does the coverage. PROS Term insurance, no matter what the form, is the lowest-cost protection you can find in terms of cash outlay while the insured is young. It is often the only way young people can afford large amounts of Life insurance protection. Another advantage of most Term policies is that they are convertible to other forms of permanent insurance. This lets you show the insured that he or she will have an option to convert later when the funds may be more readily available, and also provides an opportunity for a second sale' and second commission for your agency. Annual Renewable Term has the advantage ... follow Action Steps 4 through 7 in your sales process. The same goes for an insured who has purchased a new home. Any insured who calls to purchase or upgrade Homeowners insurance should be asked about Mortgage Redemption and other types of Life insurance. Use Letter T 3 in this campaign. A home is a long-term obligation and while the young person struggles in the first few years to make the house payments, Term insurance can provide a perfect way to protect that obligation until the client can afford permanent protection. And you can show the client how that Term policy can be converted into a permanent policy at a later date. Another change that should trigger a review is the birth of a child. New parents have a big obligation to cover! Or, instead of asking about Life insurance ...

...food and utilities or tuition and housing fees. Before taking out an emerge...

... management tool for helping producers understand the economic drivers of the business and their contribution to agency profits. Understanding the costs associated with producing business permits you to make more intelligent business decisions about adding to the sales force. It also provides insight into the amount of service staff required to support a producer's book of business. Reviewing income and expense at the producer level enables you to know what you can afford to pay your producers, and allows you to measure the success of your compensation plan and make adjustments where necessary. Profitability can be measured by allocating sales and servicing costs to each producer. Many agencies do this to some extent, but most don't go far enough. It's generally easy to allocate direct expenses such as producer salary (or commission) and benefits, travel and entertainment, and ... as telephone, printing, data processing, rent, building utilities, professional fees, and so on are all necessary expenses to running the business. They should be allocated to individual producers based on a pro-rata basis. Furthermore, a representative share of salary and related costs for administrative support staff as well as customer service staff should be charged against each producer's profit center. With this profit center approach, house' business is also treated as a profit center. The house account will undoubtedly be more profitable than any producer profit center, simply because no compensation is being paid to a producer to handle the book. But other expenses do apply. The bottom line is that an individual producer should be charged' for expenses associated with his or her book-but not for expenses to service and support other agency ...

... in new production after a minimum goal is met. Many agencies today pay more commission for new versus renewal business. In addition to an effective compensation plan for producers, we recommend compensating CSRs for their production efforts over and above their salaries. Besides, CSRs handling the phone calls, mail, claims, and the renewals often do a good job in developing existing accounts. Owners realize they can't afford to pay producers for sales or service work done by CSRs. The key to compensating staff or producers is to base pay on the job performed. This is why many agencies have stopped paying Commercial producers for Personal Lines accounts and often have lowered the amount paid to producers for small Commercial Lines accounts. We recommend paying the service staff incentives for new business as a percentage of first-year commissions and ... lower than you expect! Ideally, you can use the performance of the best producer who has ever worked for the agency as a guideline for top producer performance. The average Property/Casualty commission per producer of firms in the database at Oak & Associates (Mill Valley, CA) ranges from $200,000 to $242,000, depending on agency size. These commissions include "house" accounts and direct-bill commissions, which aren't necessarily "handled" commissions. Well-run firms have $343,000 to $446,000 in commissions per producer. In surveys asking owners what size book they would expect experienced producers to handle after three years, the answer is $150,000 to $335,000 in commission. The range depends on the size of the firm. ...

... . This document by Carol Hammes tells you how to improve employee loyalty in ways that are fair to everyone. &# 160 The average independent agency spends between 62.2% and 66.3% of revenues on compensation. Because this is your firm's largest single expense, it's essential to make sure that you're spending it wisely. Although the bloom on the dot-com rose has faded, plenty of firms can still afford to offer salaries far higher than the average independent agency can afford. As a result, agency principals must be prepared to sell prospective and existing employees on the benefits of working for their organization. This means you have to offer something beyond monetary compensation. In general, people don't take a job just for the money, nor do they leave one solely for a higher salary. An entire ... who gets either straight commissions or a salary as a draw against commissions. Only 30% of rural producers have such a plan, compared with 57% of urban sales people. For producers paid on a commission basis, these charts show average rates paid. Note that these are nationwide averages, not recommended' sales compensation percentages. They might well be too high for most firms if there's little house business and/or the owners expect the agency to produce a reasonable profit. Some agencies provide little or no back-up support to producers, while others have technically proficient CSRs, along with sales centers and marketing assistance. Take these extra support expenses into account when analyzing sales compensation. Rural Agencies Personal Lines New 49%/Renewal 23% Small Commercial New 48%/Renewal 24% Regular ...

... content has not been rated yet. DISABILITY/AUTO Dear (Customer Name): If your car is damaged in an accident, you have insurance to pay for the repairs. If your house is burglarized, you have insurance to pay for the stolen items. But what if you became disabled and were unable to work? Do you have insurance to protect your income? Most of us can't afford to pay our bills without a steady flow of income. But many people don't protect themselves from a financial disaster should they become sick. Some depend on their company plans. Unfortunately, many company plans pay for a short period or don't pay enough. You can't get by with $400 a month if your bills are $1 ,000 a month. That's why Disability Income coverage is ... x No Thanks Loading.. Disability/Auto 4/30/2013 by CompleteMarkets Editor This content has not been rated yet. DISABILITY/AUTO Dear (Customer Name): If your car is damaged in an accident, you have insurance to pay for the repairs. If your house is burglarized, you have insurance to pay for the stolen items. But what if you became disabled and were unable to work? Do you have insurance to protect your income? Most of us can't afford to pay our bills without a steady flow of income. But many people don't protect themselves from a financial disaster should they become sick. Some depend on their company plans. Unfortunately, many company plans pay for a short period or don't pay enough. You can't get by with $400 a ...

... 5 CompleteMarkets Editor 2/12/2018 12:00:00 AM Historically, a hard market is part of the cyclical nature of the insurance industry. At one time, these cycles occurred fairly consistently at about seven year intervals. However, the last significant hard market came in the mid-80s. A hard market is characterized by increasing rates and/or reduced industry capacity, which leads to affordability and/or availability problems. In addition, both underwriting and claims adjusting usually become more stringent. In the current marketplace, these conditions are exacerbated by increased uncertainty about such loss exposures as terrorism, mold, etc., and by a reinsurance market significantly strained by the events of September 11. All Articles by CompleteMarkets Editor Comments (0 ) Calling Your Referral Prospect This content has not ... by Theodore Franz Comments (0 ) Pitfalls to Avoid in Running a Captive Premium Finance Company This content has not been rated yet. CompleteMarkets Editor , Chris Farfaras 4/3 /2018 12:00:00 AM You've made the decision to form a captive premium finance company. You've also chosen to run your operation either by outsourcing to a third-party vendor or using software to run the operation in house. Chances are that your lending arrangement and state licensing are also in place. You're now ready to get started and you want to book your first loan. Before you open your doors for business, take a moment to consider some important factors in this new frontier of insurance premium financing. All Articles by CompleteMarkets Editor Comments (0 ) SALES CENTER - PART 2 This content has not been ...