By: The Altus Team
The commission-based compensation model dates back to the very inception of insurance itself, and it continues to play a major part in the way coverage is bought and sold today. The average insurance carrier awards captive agents a 5-10% commission of any policy sold, while the average independent agent makes around 15% commission. This arrangement has obvious benefits for agents and brokers, but what about their clients?
Commissions create an inherent conflict of interest that plagues the brokerage business at every level of the insurance-buying process, leaving customers without the power and leverage they deserve. By eschewing the traditional commission model for a more transparent fee-based approach, brokers can assume the role of trusted advisor and advocate.
As Altus CEO Charlie Wilmerding uncovers in his Insurance Business America article, “The trouble with commissions,” there is much to be gained from a fee-for-service model—for brokers, carriers and customers alike. For more information, drop us a line to discover what the power of objectivity in insurance can mean for you.