MAXIMIZING COMPENSATION
The transparent compensation model at Pacific Crest has been designed specifically around maximizing compensation revenue for all of our alliance partners. Pacific Crest derives its income only from continued partnerships with our agent customers. We fully understand that “our customer” is the alliance agent and we realize to remain a viable Company for the long term, Pacific Crest must operate on very slim compensation margins to keep our agents here now and into the distant future.
Unlike any other Alliance, Pacific Crest purposefully has laid out a simple plan for all of our targeted types of agents to achieve maximum compensation across multiple sources immediately or within a few short months. This compensation model has been designed strategically with all of our other resources and systems to attract our targeted agent types but more importantly to keep and retain these alliance agents.
It is common knowledge that most business relationships run into problems around the subject of money. It is for this reason that Pacific Crest treats this area of discussion with complete transparency and sensitivity. Within our organization, there are several different areas that compensation can be derived from. Some of these areas are well known to most agents but many of these areas may be foreign because they were not disclosed or were not available to the sole agency owner. As we discuss these important compensation areas at a high level, we do realize most agents will need further active discussions and clarification with Pacific Crest beyond what we can provide in this forum.
The Pacific Crest Property and Casualty compensation model can be broken down and explained in the following table:
The Pacific Crest Model
Maximizing Compensation
| Compensation Type |
Compensation Explained |
Compensation Agent |
| Commissions |
Every Pacific Crest Alliance carrier offers their own unique compensation structure which pays established & documented new and renewal commissions. Often times these Carriers require minimum levels of production, specific book size, and volume requirements before agents are eligible for the highest levels of compensation. This tiered commission structure, based upon size and volume, can negatively impact an agent’s bottom line. In many cases, agents are leaving upwards of 20% to 40% in new and renewal commissions on the table strictly based on the size and production level of their agency. Pacific Crest Alliance members benefit from both the size of the organization and the extensive production volume realized by the Alliance. Typical production concerns that force agents and agencies to sell specific policies or maintain strict volume requirements are avoided at membership. No production requirements, top-tier commission payouts reserved for the largest producers and full visibility into carrier compensation grids ensure Alliance agents are only limited by their growth initiatives. Typical Property and Casualty commissions average approximately 12-15% among represented carriers. |
Alliance agents without books of business are able to make up to 90% payouts on new and renewal business. Alliance agents bringing books of business into the Alliance are able to make 90% plus commissions. ***All commissions are paid out of the maximum commissions paid by the Carrier. |
| Contingency Bonuses/Profit Sharing |
Many Property and Casualty Carriers have Contingency and Profit Sharing Bonuses available. These bonuses are typically afforded only to Agencies that meet certain growth, retention and loss ratio requirements. Often time’s premium production levels must exceed $500k before contingency and profit sharing becomes a reality for the agency. Although available, most carriers do not have set guidelines or requirements specific to paying out these bonuses only that they are most often paid to the largest and most productive carrier relationships. The average agency will likely not participate in this bonus opportunity given the stringent requirements set and the level of production required. Since most independent agencies represent upwards of 8 to 10 markets these bonuses are unlikely unless business is placed predominantly in one or two carriers to the detriment of other carrier relationships. When agencies qualify for bonuses, carriers typically pay out larger bonuses on a complex grid system that incorporates all the stated qualification requirements. In short, the most profitable and highest premium volume agencies get paid out the largest percentages. Contingency bonuses are usually paid annually as a flat percentage and can range from 1% to a high of 6% of total premium with that Carrier. |
Pacific Crest Alliance agents have the ability to participate in the Alliance contingency bonuses paid. Each agency can participate in the Alliance total bonus payout based on their own book of business the premium volume they have placed with each carrier. Alliance agents begin to participate in carrier bonuses when their book of business with that Carrier reaches $50k. As an agent’s book of business grows with the Carrier they will receive a higher percentage of the Alliance bonus. Pacific Crest receives bonuses from a number of Carriers that most other Agencies have not been invited to receive. Pacific Crest provides our agents full disclosure of these bonuses and shares this additional compensation based on a standardized payout schedule. All agents have the ability to participate in up to 50% plus of the total Agency Contingency bonus. |
| Negotiated Enhanced Compensation |
There are a lot of negotiations and bartering that takes place between top Carriers and proven, profitable agencies. A typical meeting may include discussions centered on "If you do this….We'll do that" type of negotiations. In this environment, many large agencies, clusters and alliances secure additional revenue that is often not disclosed to the agency force that propelled the organization in the first place. It is not unreasonable, and we have witnessed first-hand, large cluster agencies negotiating > 8% in additional compensation on every policy written while turning around and putting those dollars directly into their pockets. Most of this compensation is hidden and purely subjective, depending largely on the person at the helm negotiating the enhanced compensation and the integrity of organization receiving them. |
Pacific Crest continually negotiates enhanced compensation and productivity bonuses for the Alliance. Any success achieved negotiating enhanced compensation and bonuses are shared with all Alliance agents. Negotiated Enhanced compensation can range from 2% to 15% on newly written business and production bonuses are passed through to member agents based upon fair share calculations. |
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Meet Our Most Valuable Player
Alex Pieters
Pieters Insurance - Minden, Nevada
MINDEN, Nevada — A small community of just more than 3,000 residents east of the southern tip of Lake Tahoe, Minden, Nevada, is a quiet little town in the heart of the Carson Valley.
For just about a quarter of a century, Alex Pieters was one of a handful of police officers in the county seat of Douglas County.
Knowing the community as he does, it made sense that Alex would hang his shingle in this community that once boasted it was a getaway destination for some of the biggest names in Hollywood, including Clark Gable and Jean Harlow.
Alex understands that to succeed in a small town, being competitive with price is important.
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