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💵 '''Broker remuneration''' is the aggregate financial return an [[Definition:Broker | insurance broker]] earns for its role in distributing, placing, and servicing [[Definition:Insurance | insurance]] products, viewed as a structural component of the overall cost of risk transfer. While often used interchangeably with [[Definition:Broker compensation | broker compensation]], the term carries a more formal, market-facing connotation — particularly in the [[Definition:Lloyd's of London | Lloyd's]] and London market, where remuneration rates are explicitly stated on [[Definition:Slip | slips]] and [[Definition:Binding authority agreement | binding authority agreements]] and form part of the contractual record between [[Definition:Underwriter | underwriters]] and intermediaries.

🔄 Remuneration structures can be built from several components: a primary [[Definition:Brokerage commission | brokerage commission]] expressed as a percentage of [[Definition:Premium | gross written premium]], supplementary commissions tied to volume or retention targets, advisory or placement fees charged to the client, and [[Definition:Profit commission | profit commissions]] linked to the performance of the placed book. In [[Definition:Delegated underwriting authority (DUA) | delegated authority]] arrangements, the remuneration framework is documented in the [[Definition:Terms of business agreement (TOBA) | terms of business agreement]] and must align with the expectations of both the capacity provider and any [[Definition:Regulatory compliance | regulatory]] requirements governing intermediary pay. The [[Definition:Lloyd's Market Association (LMA) | Lloyd's Market Association]] and other bodies publish guidance to ensure that remuneration levels are proportionate to the services brokers actually deliver.

📈 Getting remuneration right matters to every party in the chain. Excessive broker remuneration inflates the [[Definition:Expense ratio | expense ratio]] and can make a program uncompetitive or unprofitable for the [[Definition:Insurance carrier | carrier]]; conversely, remuneration that is too thin discourages brokers from investing in service quality, [[Definition:Claims advocacy | claims advocacy]], and meaningful [[Definition:Risk management | risk consulting]]. In an era of growing [[Definition:Broker compensation disclosure | transparency requirements]], both clients and regulators scrutinize whether remuneration aligns with the value brokers provide, pushing the market toward clearer, more defensible compensation models.

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Broker compensation]]
* [[Definition:Brokerage commission]]
* [[Definition:Broker compensation disclosure]]
* [[Definition:Terms of business agreement (TOBA)]]
* [[Definition:Expense ratio]]
* [[Definition:Profit commission]]
{{Div col end}}

Definition:Broker remuneration - Revision history

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