Wharton Study Finds Agents, Brokers Play Critical Role in Buying Process
National News • June 8, 2005
Profit-based contingent commissions align the interests of independent agents and brokers and the insurer so that correct pricing of policies is achieved, thereby alleviating adverse selection, ...
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Subject: Wharton Study
Posted On: June 9, 2005, 6:15 pm CDT
Posted By: Colton
Comment:
I agree generally with the study results.
Two important points: 1.Contingent commissions are paid to Agents and Brokers for meeting Premium goals. Additionally they are dependent upon achieving certain loss ratios on the entire book of business.2. Contingent contracts EXCLUDE all the major covers for the largest buyers, ie. WC, Excess Property/Casualty, D&O, etc.
Finaly, the Marsh deal was different. It was a Placement Service Agreement that required the carrier to make a payment up front/on volume/regardless of loss ratios.
Don't paint the thousands of Agents/Brokers with the Marsh brush. Does anyone find it interesting that the responsible Marsh senior exec's are now the new principals at Integro?...who tout they are without the Marsh problems...
Subject: Wharton Study
Two important points: 1.Contingent commissions are paid to Agents and Brokers for meeting Premium goals. Additionally they are dependent upon achieving certain loss ratios on the entire book of business.2. Contingent contracts EXCLUDE all the major covers for the largest buyers, ie. WC, Excess Property/Casualty, D&O, etc.
Finaly, the Marsh deal was different. It was a Placement Service Agreement that required the carrier to make a payment up front/on volume/regardless of loss ratios.
Don't paint the thousands of Agents/Brokers with the Marsh brush. Does anyone find it interesting that the responsible Marsh senior exec's are now the new principals at Integro?...who tout they are without the Marsh problems...