DRIVE GROWTH AND MOTIVATION WITH THE RIGHT COMMISSION SPLIT by Eric Kuhen , MarshBerry
The landscape of insurance brokerage compensation has undergone significant transformations , from traditional salary and commission models to innovative rewards and more flexible working options . But producer compensation remains a significant amount of a firm ’ s expenses and is not always designed to deliver the best return on investment . Commission structures in particular are trending in the wrong direction , specifically – there is not enough spread between commissions for new and renewed business .
Establishing the right commission split incentivizes and motivates producers to “ hunt ” new business , leading to profitability for your firm as well as the producers . According to MarshBerry ’ s 2024 Insurance Agency & Brokerage Compensation Study – many firms are offering higher than necessary renewal commissions , with overall commission splits averaging an 11-12 % difference across business lines .
BROADER COMMISSION SPLITS DRIVE NEW BUSINESS
Paying producers too high a renewal commission will only lead to challenges . Firms that offer 40 % commissions on new business and 40 % commissions on renewal business ( 40 / 40 split ) are paying a hefty commission on renewals that should require less effort from the producer .
Consequently , those firms aren ’ t growing at the same rate as top performing firms .
If producers aren ’ t spending a lot of effort servicing
20 KANSAS INSURANCE AGENT & BROKER