What is the lattice revenue contained by an insurance agents pocket if he owns his own organization? i.e. 300K within revenue?
An agency costs 1 million with 350k surrounded by revenue what is the average taken from the 350k and what is left for the agents income?
Answers:
Most new agents run at a 60% to 75% expense ratio (mainly due to selling and training). After about 5 years you start getting that down 9and your revenue go up) and agents get it to 30% to 40%.
As near any business, it depends on overhead. The more expenses a business has the smaller amount of the gross revenue the business owner can take home. So your query is a difficult one to answer because it depends on the insurance agents outgoing expenses. Are you refering to an agents commision in relation to the amount of premium brought within? If this is the case, it adjectives depends on what insurance products are sold and for what companies. To give you an conception, if I sell an auto insurance policy I receive 10% of the premium as my commision. In my state, the average auto policy is around $1200 per year.
Well, $350 within REVENUE means, commissions and contingencies. As far as how much he net, it's going to depend on how much staff and overhead costs he has. An agency on Wall STreet is going to compensate HUGE rent, and one in Iowa will discharge about 10% of that.
Assuming $300,000 within revenue, that's probably about a $3,000,000 book - if it's partially personal lines, you have 3 csr's to reward. Are there any other agents?
If they're asking 3X revenue for the selling cost, that's pretty darned honest! I'd double check the loss ratios to be sure they aren't on shakey ground beside any carriers. But if you're thinking something like buying the agency, you'll need to look at files to see what the profit is - and how much of the agent's personal expenses are coming out of the business account - close to company car and expense accounts.
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