Policy Cuts: Tales from the Sales Team

by | May 21, 2020

In our Tales from the Sales Team series, we’ll cover actual concerns and questions from real salespeople about their paycheck and sales commission.

“Am I being paid the correct insurance commission for this policy?”
– Zack, Independent Insurance Agent

Our hero today is Zack, an independent insurance agent earning insurance commission through an agency in Boise, Idaho. Zack questions some discrepancies in his latest commission check that he received through his agency. He suspects either the agency or the carrier for whom he sold the policy erred in their insurance commission calculations. 

To determine where the miscalculation happened, Zack digs through his paperwork, taking him away from doing what earns him—and his agency—more money: selling policies.

Both an agency and an independent agent need to be confident that they will earn what they deserve when it comes to policy commission.

What happened?

Calculating who earns what from an insurance policy proves to be a challenge for carriers, agencies, and agents. Both the agency and agent rely on the carrier to determine the total cut given for the sale of a policy; the agent then trusts the agency to determine how to break that cut down between the agent and any other payees involved. 

The number of levels and percentages required to measure the correct sums that go to each recipient may cause confusion for whoever ends up doing the calculations.

At the carrier level, mistakes happen. In our experience, miscalculations impact carrier payments to agencies about 20 percent of the time. Those mistakes spring up for a number of reasons. Confusion over varying pay rates for different policies often turns out to be the biggest culprit. 

When the carrier payment arrives at the agency for a policy, it may not have the agent’s name printed on it but it will have an identification or group number. This leaves the agency to take whatever disbursement they receive and determine who earns cuts based on their own records. This too can cause more confusion and, ultimately, mistakes.

Once that payment finally reaches an agent, like Zack, they may have their own cuts to hand out to partners or fellow agents who assisted with a sale. If the payment has been miscalculated at either the carrier or the agency level, that may leave them with less money to contribute to those arrangements.

How To Fix It?

Both an agency and an independent agent need to be confident that they will earn what they deserve when it comes to policy commission. Luckily we can help with all of this. 

When an agency applies Core to commission payments, all they need to do is load their carrier statements into the system. This is made even easier by our simple statement conversions process. No matter how that statement comes (paper, PDF, “carrier” pigeon), we can find an easy way to upload it for you. 

Once that data gets set up in Core, we can scan for discrepancies. For instance, if in the middle of an annual disbursement from the carrier, a payment is missed or reduced, Core captures that and allows the agency and agent to view differences through reports on the sales portal. 

Of course, our programs will also prevent mistakes when it comes to agencies determining insurance commission calculations so there will be fewer questions from the agents about their pay in the long run.

Additionally, both agency and agent can use Core reports to assess their business. Instantaneous metrics can tell an agent what they’re selling that’s earning them the most money and where they should focus their effort. Meanwhile the agency sees the larger picture based on the performance of all of their agents and employees. 

Let us help you navigate insurance commission calculations. Contact us and we’ll give you the information you need to get started.

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