Many independent or field marketing organizations come about as a way to support independent insurance agents or producers. Setting up one of these businesses, which often operates across several states, requires a lot of work. A commission plan may not seem like the most important part of the puzzle. However, if you’re hoping to work with experienced independent agents, how you distribute commissions needs a lot of thought.

Life raft hangs on rack on beach representing life insurance sold by independent agens.

Support the agents and producers working with your independent marketing organization with a well-built commission plan.

Often, carriers look to independent or field marketing organizations (IMO or FMO) as an extension of their brand. Rather than handling agents or producers directly, the carrier can contract an IMO or FMO to do it for them. However, in order to gain those contracts, your IMO or FMO needs to deliver an effective sales team. That means, in addition to licensing and setting up errors-and-ommissions insurance, you need to attract talent with a solid commission structure.

All of the talented independent agents choosing to work with your organization are taking commissions seriously. Your IMO or FMO should take it seriously too. Since we’ve helped IMOs and FMOs automate commissions in the past, we have some insight to share on the topic. Scroll down for more.

How Should a Commission Plan for an IMO or FMO Stand Out?

In order to hang onto those contracts with insurance carriers (no matter how many), you need to attract high-performing producers. Being able to detail every feature of the commission plan is an important part of that recruitment.

Depending on how many carriers you’ve contracted with, your plan may get somewhat complicated. Additionally, you’ll want to account for commission splits between the organization and the agents. Ensure that the splits are fair and competitive.

Here are a few ways to tackle a commission plan for your IMO or FMO to ensure that it’s effective and attractive to agents.

Insurance agent goes through insurance policy with client.

How to Handle Commissions as an IMO or FMO:

  • Clearly Lay Out Commission Rates for Each Carrier: Provide a breakdown of each rate by carrier. As you recruit and foster relationships with your independent producers and agents, you’ll want to be upfront about payments. Offering them resources to not only understand how they get paid but also keep up with their progress will help instill trust. Core Commissions offers web sales portals that would allow agents and producers to view their commission earnings in real-time.
  • Develop Understandable Schedule for Paying Out Commissions: In addition to the details of how independent agents get paid, they need to know when. Build out calendars that identify key dates for payouts. Depending on how many carriers your organization works with, there may be multiple payout dates. Clearly lay all of them out for your agents and keep them updated on any changes to that schedule. Withholding information like this could result in some frustration among your team.
  • Ensure Commissions are Distributed Reliably: Construct a commission management method that ensures commissions arrive in a timely and reliable fashion. The best way to do this is to employ commission software, such as Core Commissions. This will allow you to automate every step of the process with the click of a button.
  • Regularly Review Carrier Payments for Irregularities: While you’re building relationships with carriers, you’ll still want to check their work. Carriers deal with numerous commission payments every cycle. Sometimes they make mistakes, meaning you may not be getting the payments your team earned. For this reason, it’s important to keep tabs on payments and audit them for any inconsistencies. Subscribers to Core Commissions can easily perform these audits regularly to guarantee you’re getting accurate payouts.

Once you’ve developed the commission plan for your IMO or FMO, let us help you automate it. Contact us for more info or let us arrange a free demo for you. We’d be happy to show you how we can help your IMO or FMO run smoothly.

Leave a Reply