By Altus Partners
Most professional services businesses have evolved their compensation structures in step with innovation and emerging technologies—with one notable exception: the insurance industry. As professionals have reduced commissions or abandoned them entirely, how have insurance agents and brokers not only resisted this trend but increased commission rates over time? And what does this mean for insurance buyers?
In short, buyers end up on the losing side. They lose power, leverage and confidence in their agent’s or broker’s ability to provide objective advice. As long as commission remains part of the equation, intermediaries can’t honestly fight for clients’ best interests when their financial incentive is to see premiums stay the same or increase.
In his article for Business Insurance, “The insurance commission continuum—bias too big to ignore,” Charlie Wilmerding examines the evolution of broker compensation and why a fee-based model is the wave of the future. Read the article.