Remarket Personal lines Commission

by Andy
(San Rafael, CA)

Will most brokers not pay a commission on business you currently have but have had to market to another carrier for a lower premium, just to keep the client?

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RE: Remarket Personal lines Commission
by: Anonymous

We call this a Re-Write. As an independent agency, we often move a client from one company to another at renewal time. But occasion does arise when the have to move someone mid-policy period. We base our commission to producers on the Original effective date of the policy/line of business. So if the policy is moved during the first, original effective period of the policy, the producer receives the new business contract split. If this happens after the initial effective policy, than the producer would receive the contract split for renewal business.

Often carriers pay more on new business then renewal to the agency. Example in our P&C agency: 18% new business, 15% renewal. In the case of a re-write to such company, but after the original policy period, the agency would receive 18% commission and the producer would receive the agreed upon renewal commission split in his or her agency contract for that 18%.

In our agency, most renewal and re-write business is managed by account managers (CSRs) on behalf of the producer. So we feel this is a fair arrangement.

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Re: Broker commissions
by: Ted

Hey Andy;

If I understand you Correctly, you are saying that you had to re-write a case with another carrier to get a lower premium so that you could keep the client.

Basically, this probably falls into the category of a replacement policy.

I would then say this is usually done on a case by case basis.

Normally, the agency you are writing for would have some type of written policy re: this situation. I would look to that.

With out knowing all the details it is hard to say what your agency or company policy is.

Some time common sense don't make sense to the big companies. And today the profit margin is pretty this on writing business.

Hope this helps. feel free to respond.

Ted


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