https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3ACommission_%28insurance%29 2026-05-04T00:04:19Z Revision history for this page on the wiki MediaWiki 1.43.8 https://www.insurerbrain.com/w/index.php?title=Definition:Commission_(insurance)&diff=7430&oldid=prev 2026-03-10T12:55:40Z

<p>Bot: Creating new article from JSON</p> <p><b>New page</b></p><div>📋 &#039;&#039;&#039;Commission (insurance)&#039;&#039;&#039; is the primary form of compensation that [[Definition:Insurance carrier | insurers]] pay to [[Definition:Insurance agent | agents]], [[Definition:Insurance broker | brokers]], and other [[Definition:Intermediary | intermediaries]] for producing and servicing business. Expressed as a percentage of the [[Definition:Premium | premium]] written or collected, the commission compensates the intermediary for originating the sale, advising the [[Definition:Policyholder | policyholder]], and often handling ongoing service tasks such as [[Definition:Endorsement | endorsement]] processing and [[Definition:Claims handling | claims assistance]].<br /> <br /> ⚙️ Commission structures vary widely depending on the [[Definition:Line of business | line of business]], [[Definition:Distribution channel | distribution channel]], and contractual arrangement. A standard [[Definition:Independent agent | independent agent]] might earn a base commission of 10–15 percent on [[Definition:Commercial lines | commercial lines]] and up to 20 percent or more on [[Definition:Personal lines | personal lines]], while a [[Definition:Managing general agent (MGA) | managing general agent]] operating under [[Definition:Delegated underwriting authority (DUA) | delegated authority]] may negotiate a different rate that reflects the additional underwriting and administrative functions it performs. Some carriers supplement the base rate with [[Definition:Contingent commission | contingent commissions]] or [[Definition:Commission override | commission overrides]] tied to profitability or volume targets. The commission typically gets deducted from the gross premium before the net amount is remitted to the carrier, though the exact mechanics depend on whether the intermediary operates under a [[Definition:Brokerage agreement | brokerage agreement]] or an [[Definition:Agency agreement | agency agreement]].<br /> <br /> 💡 Understanding commission economics is essential for anyone analyzing an insurer&#039;s [[Definition:Expense ratio | expense ratio]] or an intermediary&#039;s revenue model. Commissions represent one of the largest components of an insurer&#039;s [[Definition:Acquisition cost | acquisition costs]], and even small changes in commission rates can materially affect [[Definition:Combined ratio | combined ratio]] performance. For [[Definition:Insurtech | insurtech]] companies building digital distribution platforms, rethinking the commission model — through flat fees, reduced rates on digitally originated policies, or embedded commission structures — has become a key lever for achieving a lower cost-to-serve while still compensating producers fairly.<br /> <br /> &#039;&#039;&#039;Related concepts&#039;&#039;&#039;<br /> {{Div col|colwidth=20em}}<br /> * [[Definition:Contingent commission]]<br /> * [[Definition:Commission override]]<br /> * [[Definition:Expense ratio]]<br /> * [[Definition:Acquisition cost]]<br /> * [[Definition:Agency agreement]]<br /> * [[Definition:Brokerage agreement]]<br /> {{Div col end}}</div>

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