https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3ARevenue_shareDefinition:Revenue share - Revision history2026-04-30T05:46:10ZRevision history for this page on the wikiMediaWiki 1.43.8https://www.insurerbrain.com/w/index.php?title=Definition:Revenue_share&diff=8191&oldid=prevPlumBot: Bot: Creating new article from JSON2026-03-10T13:49:14Z<p>Bot: Creating new article from JSON</p>
<p><b>New page</b></p><div>🤝 '''Revenue share''' is a compensation arrangement in the insurance industry where two or more parties split the income generated from an [[Definition:Insurance program | insurance program]], [[Definition:Book of business | book of business]], or technology platform according to pre-agreed percentages or formulas. Rather than paying a flat fee or fixed [[Definition:Commission | commission]], a revenue-share model aligns the financial interests of all participants — such as an [[Definition:Insurance carrier | insurer]] and a [[Definition:Managing general agent (MGA) | MGA]], a [[Definition:Coverholder | coverholder]] and a capacity provider, or an [[Definition:Insurtech | insurtech]] and its distribution partner — by tying each party's earnings to the overall commercial success of the venture.<br />
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📐 The structure of a revenue share varies widely depending on the relationship. In a typical MGA–carrier arrangement, the MGA may receive a percentage of [[Definition:Gross written premium (GWP) | gross written premium]] that covers its [[Definition:Acquisition cost | acquisition costs]], [[Definition:Underwriting | underwriting]] expenses, and profit, while the carrier retains the remainder to fund [[Definition:Claims | claims]] reserves and its own margin. Some deals layer in a [[Definition:Profit commission | profit commission]] that increases the MGA's share if [[Definition:Loss ratio | loss ratios]] stay below agreed thresholds, effectively blending a base revenue share with performance-based incentives. In the [[Definition:Insurtech | insurtech]] space, platform providers that supply [[Definition:Quote-and-bind | quote-and-bind]] technology or embedded distribution channels often negotiate revenue shares with the carriers whose products flow through their systems, rather than charging traditional licensing or per-transaction fees.<br />
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💡 The appeal of revenue-share models lies in their ability to distribute both opportunity and accountability. When an MGA or distribution partner's income depends on profitable growth rather than volume alone, there is a natural incentive to maintain [[Definition:Underwriting discipline | underwriting discipline]] and invest in [[Definition:Loss control | loss control]]. For carriers, offering a generous revenue share can attract high-quality [[Definition:Managing general agent (MGA) | MGAs]] and [[Definition:Insurtech | insurtechs]] without requiring large upfront capital commitments for new distribution channels. However, these arrangements demand robust [[Definition:Bordereaux | reporting]], transparent [[Definition:Accounting | accounting]], and clearly drafted contracts to prevent disputes over what constitutes "revenue" and how [[Definition:Return premium | return premiums]], [[Definition:Reinsurance | reinsurance]] costs, and [[Definition:Tax | taxes]] factor into the calculation.<br />
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'''Related concepts'''<br />
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* [[Definition:Profit commission]]<br />
* [[Definition:Commission]]<br />
* [[Definition:Managing general agent (MGA)]]<br />
* [[Definition:Binding authority agreement]]<br />
* [[Definition:Delegated underwriting authority (DUA)]]<br />
* [[Definition:Embedded insurance]]<br />
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