Independent vs Captive - The Math Of A $1,000,000 Book

Did you know that an independent insurance agent will make over 300% more profit on a $1,000,000 book of business than a captive agent? At Pacific Crest we spend a lot of time talking with captive insurance agents showing them exactly how much money they’ve been throwing away.

The results of these conversations are shocking.

Captive carriers do an amazing job at pulling the wool over your eyes. You are building a “business”. You can retire and leave it to your kids. You’re going to make six figures. We provide name recognition.

Here’s a beer bong you can use to drink the kool aid. Keg stands anyone?

All these things are fine. You should want to make six figures. You should want to build a business. You should want to leave it to your kids. The problem with captive carriers however is that 99.99% of the time, none of this is true.

And the worst part? Your profit margin is paying for this dog and pony show.

Assume you have $1,000/mo in rent. You pay a CSR $3,000/mo. You have an additional $1,000/mo in marketing, utilities, and misc expenses. Check out the math below on how much yearly profit you take home on a $1,000,000 book for an independent vs a captive agent.

Independent Insurance Agent

Premium = $1,000,000

12.5% Commission = $125,000

Rent = -$12,000

CSR = -$36,000

Misc = -$12,000

Profit = $65,000

Captive Insurance Agent

Premium = $1,000,000

8% Commission = $80,000

Rent = -$12,000

CSR = -$36,000

Misc = -$12,000

Profit = $20,000

That’s over a 300% difference, an independent insurance agent will make 3 times more for the same amount of work as a captive agent. If you’re ready to stop throwing away money go check out our Enterprise Agent program and request a consultation. Stop spinning your wheels and get started building a profitable business!