Topic Thread

Insurance Fee's and Comssions

  • 1.  Insurance Fee's and Comssions

    Posted 06-13-2019 14:17
    What do most people end up paying their insurance broker (GL, WC, etc.) in commissions? Buried in our renewal packet we can see the percent of the premium that the broker is receiving for each of our policies. I checked the rates online and found the range of commissions should be between 5-20%. I am curios if that range is accurate and generally where people fall. Thanks for any input.

    ------------------------------
    Brian Tingey
    Controller/CFO
    Sure Steel Inc.
    South Weber UT
    (801) 917-5800
    ------------------------------


  • 2.  RE: Insurance Fee's and Comssions

    Posted 06-14-2019 09:12
    The range is accurate.  Given the mix of policies for a typical contractor, I'd say the average commission for all property and casualty premiums will be 11%.  Worker's compensation being the lowest commission at 5-10% and usually the largest premium.  Property in the 15-20% range and other coverages up to but usually less than 20%

    ------------------------------
    Jeffrey Segall AU, ARM, CIC, CRM, CPCU, CRIS
    Svp
    American Global
    Clearwater FL
    (727) 643-6896
    ------------------------------



  • 3.  RE: Insurance Fee's and Comssions

    Posted 06-14-2019 10:36
    Brian,
    I would say that is accurate. The commission amount should not be secretive. If you request your broker to disclose it, it shouldn't be an issue.
    We typically provide a pie chart that shows the % of commission for each line of coverage and the grand total of "how much are you paying your broker to be your risk manager".

    ------------------------------
    Emily Glanz CRIS, AAI
    Risk Management Consultant
    Cottingham & Butler
    Dubuque IA
    (563) 587-5403
    ------------------------------



  • 4.  RE: Insurance Fee's and Comssions

    Posted 06-15-2019 10:55
    The range sounds accurate.  When I served as a risk manager for construction companies, we always asked (and always received) a very clear breakdown of the commissions being paid on each policy.  One other note, you should probably inquire as to whether your broker or agent is receiving contingent commissions as well.  Those are often very difficult if not impossible to identify and articulate, as they depend on a wide range of factors (such as volume and type of coverage placed with that carrier, the renewal/retention rate of that business, the overall loss ratio of that block of business, etc.). Contingent commissions have fallen out of favor with many carriers, and are not used today nearly as often as they were 10 or 20 years ago, but they have not completely disappeared.  You will not be able to pinpoint any amounts of those that might derive from your policies, but you should be aware if they are being provided to your broker.

    ------------------------------
    David Dolnick CRIS
    President
    Dolnick Risk Advisors
    San Diego CA
    (619) 569-2280
    ------------------------------



  • 5.  RE: Insurance Fee's and Comssions

    Posted 30 days ago
    We recently switched brokers and they provided a schedule of commissions and fees.  I would ask you current broker and any prospective broker to provide this information.  We did not think the amounts were out of line, but feel we should know what we are paring for....  Insurance Coverage vs. Broker Service.

    ------------------------------
    Todd McDaniel CPA, CCIFP
    Corporate - Financial / Tax Administrator
    Streimer
    Portland OR
    (503) 288-9393
    ------------------------------