2019 Best Practices Study

Without question, an insurance agency’s most valuable asset is its people. An agency’s compensation practices must allow it to successfully compete for talent, while at the same time ensuring healthy profit margins to deliver acceptable shareholder returns. The Best Practices Study identifies the most important compensation-related key performance indicators for agency leaders as they manage the delicate balance between compensation, growth, and profitability. Producer Compensation. Producer Compensation in our industry is typically a function of a producer’s new and renewal commission & fee results. Producers are usually paid a percentage of new (first year) commission and fee business and then a renewal percentage each year as the account renews (e.g., 40% new / 30% renewal).

L/H/F Commission Structure

Commercial P&C Commission Structure

50%

46.5%

45.6%

50%

45.5%

42.4%

43.0%

40.3%

42.5%

42.2%

39.2%

40%

39.5%

36.9%

35.8%

40%

36.8%

34.8%

31.6%

30.4%

29.2%

30.7%

29.9%

30%

27.4%

26.8%

27.6%

27.5%

30%

27.4%

20%

20%

10%

10%

0%

0%

< $1.25M $1.25M- $2.5M

$2.5M- $5.0M

$5.0M- $10.0M

$10.0M- $25.0M

> $25.0M

< $1.25M $1.25M- $2.5M

$2.5M- $5.0M

$5.0M- $10.0M

$10.0M- $25.0M

> $25.0M

New

Renewal

New

Renewal

Support Staff Payroll. The Best Practices Study also provides detailed benchmark data to assess departmental support staff compensation levels. A comparison of your agency’s departmental support staff payroll (as a % of departmental revenue) versus Best Practices peer agencies is an important way to ensure your compensation practices are in-line with industry norms.

L/H/F Support Staff Payroll as % of Dept Rev

P&C Support Staff Payroll as % of Dept Rev

10% 15% 20% 25% 30% 35%

10% 15% 20% 25% 30% 35%

29.9%

28.2%

27.4%

27.1%

23.9%

21.3%

20.0%

18.0%

18.7%

17.3%

17.0%

18.0%

17.9%

16.3%

16.5%

15.0%

15.8%

14.3%

0% 5%

0% 5%

< $1.25M $1.25M- $2.5M

$2.5M- $5.0M

$5.0M- $10.0M

$10.0M- $25.0M

> $25.0M

< $1.25M $1.25M- $2.5M

$2.5M- $5.0M

$5.0M- $10.0M

$10.0M- $25.0M

> $25.0M

Life & Health / Financial

Commercial Lines Personal Lines

 23