Incentive Compensation and the Use of Contingent Commissions by Smaller Distribution Channel Members
21 Pages Posted: 10 Oct 2006
Date Written: September 2006
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: Suggested Citation