If you are a rich sports fanatic, you can buy a professional baseball team. But what kind of team – big league or triple A – depends on how rich you are.

Not so, apparently, for the insurance agency owner.

See, if you have producers that play small ball – personal lines – you have small returns and own a small team.  As we shall see shortly, if you have big league producers you are automatically in the big leagues of agency owners.

What? Huh?

Stay with me! What I’m talking about is how much money everybody makes. See, the average CL Producer makes $113,000 compared to a PL producer who only makes $47,000. AND the average CL producer generates sales of $322,600 compared to a PL producer’s $115,700. Clearly, the CL producer is big league in comparison!

Well, you say maybe there are other things to consider? No. See the CL producer’s book grows the same percent on average as the PL producer’s. So, the big get bigger faster. The CL producer has less turnover of customers (is this important to the bottom line?). The CL producer produces 36% of book new each year compared to the PL producer at 46%.

OK, but I have to pay a higher commission rate. Yes, you do but not much. The average CL producer is paid 36% new and 30% renewal compared to a PL producer’s 30% and 21%. BUT the average commission per account is $2424 compared to $281.

Who is Big League?

But, but, I live in a small market. Big League teams only play in cities. Not so fast… The average commission per account, book size, income level and every other meaningful producer stat is virtually the same—big city or small town.

What is different is that some agency owners are afraid, or unwilling, to play big league ball. You don’t have to be rich to decide; you just have to be smart.

What kind of team owner are you?

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