Incentive Compensation and the Use of Contingent Commissions by Smaller Distribution Channel Members

21 Pages Posted: 10 Oct 2006

See all articles by James M. Carson

James M. Carson

University of Georgia

Randy E. Dumm

Florida State University - Department of Risk Management/Insurance, Real Estate and Business Law

Robert E. Hoyt

University of Georgia - C. Herman and Mary Virginia Terry College of Business

Date Written: September 2006

Abstract

Insurers operate in a complex market in which many firms compete for business. In this context, we examine the use of contingent commission compensation arrangements for independent agents and we explore whether the use of contingent commission compensation arrangements is justified for this segment of the distribution channel. We find that the various types of producers, distribution systems, and compensation structures, including contingent commission compensation, are a natural development of the competitive insurance marketplace that helps to make insurance available and affordable to millions of insurance consumers.

Keywords: Contingent Commission, Compensation, Insurance, Intermediary

JEL Classification: D23, D40, G22, L10

Suggested Citation

Carson, James M. and Dumm, Randy E. and Hoyt, Robert E., Incentive Compensation and the Use of Contingent Commissions by Smaller Distribution Channel Members (September 2006). Available at SSRN: https://ssrn.com/abstract=936107 or http://dx.doi.org/10.2139/ssrn.936107

James M. Carson (Contact Author)

University of Georgia ( email )

Athens, GA 30602-6254
United States

Randy E. Dumm

Florida State University - Department of Risk Management/Insurance, Real Estate and Business Law ( email )

College of Business
Tallahassee, FL 32306
United States

Robert E. Hoyt

University of Georgia - C. Herman and Mary Virginia Terry College of Business ( email )

Athens, GA 30602-6255
United States
706-542-4290 (Phone)
706-542-4295 (Fax)

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