Four Shocking Takeaways from the 16th Annual WDC Metro Insurance Salary Report for 2019
There is no other way to put this so I will come right out and say it: “Insurance Agency Workers of the World (WDC region) Unite.” All you have to lose are your Chains.” Yes, that was Karl Marx from the 19th Century.
The results of the insurance salary report are surprising. No, they are Shocking. Here are four takeaways.
Employee Benefits (EB) is Crushing P&C: Regarding 2019 salary levels, EB is crushing their P&C (mostly commercial lines) counterparts. It’s not even close.
For those employees with 15+ years of experience in small agencies (2-25 employees), our data shows EB Account Managers are making $10,050 (12.12%) more than their P&C colleagues. In large agencies/brokers (roughly Top 30 in WDC metro) EB account managers with 15+ years of experience are making a whopping $28,050 (28.49%) more than their P&C colleagues.
This is even more surprising in that senior commercial lines account managers tend to have a higher level of education and industry expertise than their EB colleagues.
Comparing P&C producers with EB producers with 15+ years of experience shows the same pattern. EB producers with 15+ years of experience working in small firms make, on average, $90,500 (27.34%) more than their P&C counterparts. In large agencies, it’s $100,500 (26.87%) more.
P&C Compensation Growth over the Past Five Years is Virtually Flat: For those with 15+ years of experience, EB account managers with the large firms have experienced a 29.82% five year growth rate while their P&C counterparts with small firms have experienced total salary growth over the same period of only 13.85%. With large firms, it is EB clocking in at 20.86% and P&C at 8.28%. I had no idea there was this much disparity between P&C and EB. WOW.
Producers Rule Over Account Managers: This is one of the areas that really bothers me. Yeah, I get it: Producers bring the business in. Okay. Check. But who does all the behind the scenes work such as quoting, pricing, carrier relations, claims, renewals, support, and all the service?? The Account Manager.
The insurance agency business model is pretty simple: Owners & Producers make ALL the money. How do you explain the fact that most senior producers work less than a full work week while account managers are putting in 40-50+ hours with producers making between 3 and 4 times that of their account manager?
And why don’t owners (or producers) pay their account managers a production bonus? C’mon fellas: can’t ya share a little piece of the pie with your fellow workers? I just don’t get it. Account Managers are the backbone of your business. If they staged a walk-out, your business would be DEAD. IN. THE. WATER.
And then there are the owners who are stupid enough to rub it in the face of the account managers. You know the ones who park their Cadillac SUVs in the employee lot just to show off. And then their kids show up in their SUVs too. Not good optics. And the employees notice this too. These are the ones I recruit. This leads me into my #4 observation relating to small mom & pops versus the big boys.
The Curious Case of the “Mom & Pops”: If the large firms continue their acquisition binge, hell, next year there may not be any more ‘mom & pops’ left. Account Managers with 15+ years of experience working in large agencies make, on average, 28.54% more than those working in small agencies (mom & pops). Producers make 12.76% more only because the gross compensation amounts are so high.
EB over P&C: If I were starting my career in insurance brokerage, I would definitely consider working on the employee benefits side of the business. I still believe P&C is more industry specific and interesting, but the bottom line is that EB pays much more.
Jump Ship: I would also suggest you consider working for a large agency/broker. You don’t have nearly the nepotism to deal with that exists in virtually every family business and you make more money. Significantly more growth too. Additionally, with all the acquisitions taking place now, I would jump ship at my earliest opportunity to a larger firm before the music stops and you’re looking for a chair.
I am sure a bunch of my clients will be calling me after reading this, but this one is for the Little Guy out there. Have a Happy Holidays!