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Aside from loss payments, distribution expenses including commissions and other sales expenses represent the largest expense incurred by most property-casualty insurance companies. To better understand the business practices impacting this important function, Ward Group conducted a study to benchmark various practices and expenses associated with agency management and compensation.
The report presents the findings of an in-depth survey of agency compensation and management practices conducted from February to April 2015. The study will serves as an update to the Agency Compensation and Management Practices report last published by Ward Group in June 2013.
Table of Contents
Introduction
- Overview
- Benchmark Groups
- Executive Summary
Key Findings
- Benchmark Profile
- Participant Agent Profile
- Indicators of Agent Performance
Base Commission Practices
- Timing of Commission Payments
- Commission Repayments/Modifications
- Notification Requirements
- Commission Schedules
Contingent Commission Practices
- Target Contingent Commission Practices
- Loss Ratio
- Agency Commission and Production
- Retention Requirements
- Contingent Commission Changes
Agency Management Practices
- Agency Appointments and Terminations
- Agency Retention
- Distribution Management Staffing
- Internal Pay Practices
- Agency Goals
- National Agency and Aggregator Strategy
- Agency Tiering
- Agency Trips
- Other Agent Benefits
- Sales and Marketing Analytics Capabilities
- Agency Portal
Appendix: Detailed Study Results
Profile of Participants
A diverse group of 57 insurance carriers participated in the survey. In order to maintain the confidentiality of the data, the names of the participants have not been disclosed.
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