Insurance Agent compensation [4 Kinds Of Companies]
In our article about Insurance Agent Compensation 101 we listed 18 insurance companies and provided information about their agent’s earnings, whether they were based on salary, commission, or both. In this article I will elaborate further and divide insurance companies into four groups based on their business strategy and agent compensation. The four groups are as follows:
Group 1: Low salary, commission.
Group 2: No salary, High commission. An important subgroup is MLM.
Group 3: Full Salary - Traditional.
Group 4: Full Salary - Retail/Web store insurance.
Group 1 - Low salary, commission.
This group includes companies such as Northwestern Mutual and their business strategy is to pay a small living stipend (for example NW pays $100 a week) to keep the agents going and basing most of the compensation on commission. This is one of the less common models insurance companies adopt.
Group 2 - No salary, High commission.
This group includes companies such as New York Life, Nationwide, AIG, and All State. Their business strategy is to onboard agents, train them and send them out into the world in a “survival of the fittest” manner. Many agents get discouraged and quit since there is no upfront compensation and often there are costs for running the business. Some of the companies do provide a salary during the training period.
There is one subset of this model that also employs MLM (Multilevel Marketing) tactics to grow their agent base such as Transamerica, WFG, and Primerica. These companies compensate agents not only for selling insurance, but also for bringing on new agents, giving them a cut of their “understudies’” sales.
Group 3 - Full Salary - Traditional.
This group includes companies such as MetLife and John Hancock. These companies pay agents a full salary but their business model is very traditional.
Group 4 - Full Salary - Retail/ Web store insurance.
This group includes companies such as Polcygenius, Lemonade, Ethos and Zebra. The also pay full salaries but use sleek web design and processes to bring in new customers and close deals, minimizing the labor overhead.
InsuredTY wants to be group 4!
We want to pay a decent salary ($22/hour for 10 weeks), train employees (Hubspot CRM credentials) and use strong digital marketing to promote our products and bring in traffic. This way we keep employees happy and motivated while leveraging technology as a multiplier.