3 Minute Read
Alright, insurance pros, let’s talk about the thing no one wants to talk about but absolutely should: agency fees. If you’re in a state that allows them and you’re not charging them, you’re basically leaving money on the table. And let’s be honest, when was the last time your landlord said, “Don’t worry about rent this month”? Exactly.
The Excuses (Ahem, Objections)
Every time I bring up agency fees, I hear the same two excuses:
- “My staff isn’t comfortable billing them.”
Your staff also wasn’t comfortable with their first sales call, but they got over it, didn’t they? This is a skill, and skills can be learned. - “Our customers won’t want to pay them.”
Newsflash: customers don’t want to pay for anything. They also don’t want to pay $7 for a latte, but Starbucks isn’t hurting, are they? If you deliver value—and you do—they’ll pay.
(And yes, there’s a whole separate blog post to be written about handling these objections, but today we’re staying focused on the big picture.)
Why You’re Working for Peanuts
Let’s crunch some numbers, shall we? Take a small commercial account with three policies (GL, BOP, and Workers Comp) and a combined premium of $10,000. The average commission is 10%—so you’re starting with $1,000.
Now, your producer takes 50–60%, leaving your agency with $400–$500. Sounds okay-ish? Think again.
Consider the account manager’s time: quoting multiple carriers, chasing signatures (because, let’s be real, not all producers handle that part), answering endless questions. If they spend just 12 hours over the year, your “profit” evaporates. And that doesn’t include overhead like rent, utilities, or your shiny management system.
You’re not running a charity here—you’re running a business.
Time to Get Real
Here’s the truth: you’re a professional, your team is professional, and your agency delivers real value. So why are you apologizing for wanting to be compensated fairly?
If you’re in a state that allows agency fees, it’s time to embrace them. Not sure how to start? I can help you build a plan that will have your team confidently rolling out agency fees and, dare I say, enjoying it. Let’s turn that uncomfortable conversation into a win for everyone—especially your bottom line.
Now go charge what you’re worth. Your coffee fund will thank you.