ALIGNING COMPENSATION STRUCTURES WITH INDUSTRY STANDARDS by Carey Wallace , AgencyFocus
There ’ s a good chance you ’ ll agree that your most valuable asset is your team , and the insurance industry is no different . I meet people every week who have amazing team members that hold irreplaceable knowledge and skills .
In fact , the success of your agency is closely tied to the effectiveness of your team – especially your producers , account managers , and client service representatives . These key players drive revenue , maintain client relationships , and ensure retention of your clients remains high . However , one of the most critical , yet often overlooked , components of managing a successful insurance agency is developing a compensation structure that aligns with industry standards .
When your compensation structure deviates from industry norms , it can create a ripple effect , harming your agency ’ s profitability , reducing your ability to reinvest in growth , and even impacting the transferability of your agency during a sale .
CURRENT INDUSTRY COMPENSATION STRUCTURES
Before diving into the risks of deviating from standard compensation structures , let ’ s first outline what those standards generally look like across three key roles within an insurance agency :
Producers Producers are the revenue drivers for your agency . Industry-standard compensation for producers typically includes a base salary plus commission on the business they generate until a producer validates and then their compensation is transitioned to 100 % commission . Depending on the focus of the producer , commissions for new business can range
18 KANSAS INSURANCE AGENT & BROKER