2021 Brokers Compensation Report
The 2021 Broker Compensation Report examines the commissions and fees that come with brokerage services. How much are insurance buyers spending on brokerage services? Which industries pay more and what lines of business have the highest compensation paid as a percentage of premium? Are insurance buyers paying their brokers fees or commissions?
Over the last 10 years, Advisen has been polling insurance buyers about their views on product offerings and compensation. The results of the latest survey includes the following findings:
• The size of an organization has a material impact on broker compensation and services.
• Compensation practices vary significantly across industries.
• While survey responses point to a slight decline in the percentage of buyers who pay brokers overall fees and a marginal increase in those who compensate brokers with only commissions, written comments clearly indicated the continued recognition of the benefits of fee-based compensation.
• Renewal or marketing action plan management, coverage recommendations, and market identification/selection were identified by survey participants as the services most valuable to their organizations.
• Insurance buyers gave their brokers high marks in terms of providing services during the COVID-19 pandemic, with a vast majority of respondents reporting that their brokers met all of their organizations’ needs virtually.
• More than half of the respondents reported an increase in retentions assumed amid the hardening market. Survey participants reported rate increases across all lines of business except for Workers Compensation
Launched in 2008, the Insurance Broker/Agent Compensation Survey has seen how broker compensation practices shifted from commission-based pricing to fee-based services and back again. It has also documented the similarities and differences of insurance buyers’ and brokers’ views.