The percentage of premium a carrier pays an agency for placing and keeping business, often at different rates for new versus renewal policies.
Commission (New vs. Renewal)
The percentage of premium a carrier pays an agency for placing and keeping business, often at different rates for new versus renewal policies.
Commission is the primary way independent agencies earn money — a percentage of the premium paid by the carrier for placing and servicing a policy. Rates vary by carrier and line of business.
Carriers frequently pay a different rate on new business than on renewals.
- New-business commission may be higher to reward growth, or in some markets lower.
- Renewal commission is the recurring income that makes a book of business valuable, which is why retention is so closely watched.
Personal lines commissions commonly run in the low-to-mid teens as a percent of premium, while commercial lines are often higher. Agencies track commission by policy in the management system, and many carriers deliver the detail through commission download.