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...temptation to play the game. It is rarely a good personnel-management decision...

... individual as head of marketing. Rarely a full-time separate position, this ...r branch office's ratio, rollovers of books of business, etc., the agency mus...

...stic of intelligence.' Because LUs rarely recognize themselves, if you feel yo...

...or business through cold calls are rare birds. My guess is that you're not one...e product before they open their checkbooks. For this reason, meeting you thro...

...accounts are lost, new business is rare, or carriers do bad things to the agen...unselor. An insurance agency owner is rarely qualified to provide personal cou...

...client. For example, referrals are rarely based on detailed inquiries into a p...

... great, agencies don't always have enough extra fat to cover the extra time and energy required. Just make the right decision, document it properly, and get on with it. MANAGERS WITH AGENCY EXPERIENCE Another alternative is a dedicated manager with years of agency experience, usually as a producer/partner. These people tend to have strong leadership skills and personality traits that fit an agency environment. They rarely get bogged down in paperwork (since many refuse to do anything but the minimum) . On the other hand, former producer/partners tend to have distinctive management issues that must be addressed: Desire to Manage. Managers with agency experience are usually adept at developing relationships and selling. In fact, they usually prefer those activities to managing — which can be a key weakness for a manager ... that they might not have the right personality for running an agency. Understanding and handling these differences from the beginning can help diminish problems down the road. Here are a few issues that I've seen when bringing a manager with company experience into an agency. Sales Ability. A significant issue with former company people as agency managers is that most are not salespeople. At best, some can take over books (and even keep those books intact), but maintaining renewals and making sales are two very different things. The problem with having an agency president who can't sell is that they're disconnected from the lifeblood of what makes a successful agency. Simply increasing profits by cutting expenses is not a sustainable business strategy. In my experience, producers don't respond well to managers who can't sell. People like ...

... are all aspects of good producer management, which improves morale for all but the less successful producers because employees see a fair free enterprise system. Eliminating an entitlement environment also improves morale. Managing the agency becomes easier because when producers gripe, the best answer is, "produce more," which creates a more competitive environment that pushes each producer to greater success. In visiting dozens agencies, I've rarely seen these practices. Those few that do practice good producer management achieve far greater success than those that do not. Many agencies forget that a fair system must eventually be based on results. The effort to be fair to all based on good faith effort is simply misguided. It's not easy to make hard decisions. However, it's far easier than having a problem and knowing that you're not ... only fair, but it is also smart producer management. That's it. Agencies don't owe their producers anything else. They don't owe them an expense account, a car or even a lead list. These items can arguably make producers more successful, but that does not mean the agency owes them these perks. These items are truly perks. What would happen if these perks increased as a producer's book increased? When an agency increases producers' perks as their books increase, it's focusing significant resources on its most important assets, which makes of sense. Agency expenses will decline if managed well because the value of the perks need not increase at the same rate as sales. Limiting these perks to reasonably sized books, minimizes these expenses. These are all aspects of good producer management, which ...

... % renewal Small Commercial: 40% new, 30% renewal Commercial: 40% new, 30% renewal Although these levels vary by region, the agency must understand that they can only pay what they can afford. The agency must figure out what percentage of the commission it takes in their location to run the agency and include a bottom-line profit. Most agencies, if they're honest, can rarely afford to pay much more than 35% new and 25% renewal. Anything higher and the agency is losing money just to have a producer. If the producer is there for other reasons, say to help grow the agency so that the agency owner can sell for a higher multiple, treat this arrangement as a capital investment. If the producer is there just so the agency owner can ... and everything from 70% new/0 % renewal to 20%/20% for Commercial. For Personal Lines, the variance is even greater. The "right" answer depends on the support the producer receives, the kind of business being written, whether the agency or the producer pays expenses, what the producer writes, how much experience the producer has, and the size of their book. Anyone who uses "industry averages" is sure to get the answer wrong. It's difficult to appraise the value of the producer. The key is that the producer must usually produce at least $200,000 in annual commission for the agency to break even at any split (Commercial Lines) if the producer is paid more than 33% on renewals. FACULTY RESPONSE On average, ...

... document.For the past 12 years, I've asked thousands of agents why they don't place more accounts with companies that pay higher bonuses — and few ever answer correctly. Typical responses include: "The company paying the low bonuses must pay higher commissions." Reality: This is seldom the case. "The company paying low bonuses is easier to do business with." Reality: This is rarely the case; and even if it is, is the ease worth a 67% pay cut? "It's hard-to-place business." Reality: We're discussing companies that will pay more for the same book. The true answers are: Ignorance. Most agency owners never read their contracts to learn which companies pay more. Reluctance. Agents' aversion to negotiating contingencies with companies is strange — because ... /Accounting Risk Management Human Resources Selling Legal and E&O Technology Life/Financial Services Glossaries Management Resources & Links Categories Popular Recent All Back Company Contracts: Double Your Bonuses 4/30/2013 12:00:00 AM by CompleteMarkets Editor , Chris Burand This content has not been rated yet. If one company is willing to pay twice the bonus for the same results, the same book, the same ease of doing business, and the same benefits to your customers, why not place more accounts with that company? Chris Burand demystifies company contracts and bonuses in this document.For the past 12 years, I've asked thousands of agents why they don't place more accounts with companies that pay higher bonuses — and few ever answer correctly. Typical responses include: "The company paying ...