Insurance Brokerage

There is a number of different methods for pricing and earn revenue for your business insurance brokerage. In general, brokers use a model of the Commission or a model advisory fees.

Commission Blueprint

Typically, insurance brokers are paid commissions directly by the client, but are paid commissions by insurance companies whose products they sell, like a realtor. However, since these commissions are calculated as a percentage of premiums sold, there is an incentive for brokers to sell insurance more expensive for customers. Thus, although theoretically independent brokers can sell the products of an insurance provider, they may choose not to. That's because insurance providers pay different rates of the Commission, providing an incentive for a broker trying to sell the products of companies that pay higher rates, regardless of the client's interest.

Many insurance brokers who work on a model of the Commission are trustworthy and impartial agents, affected by these conflicts of interest. However, even in these cases, clients who understand how brokers are paid can see where it is not bias. To win the trust of clients, brokers must be transparent about how they make their recommendations and how they are paid.

Model Tariff Advisory

By charging customers setting of advisory fees for the service to find the right insurance for them, a postal insurance brokerage itself as a neutral expert, whose services are valuable beyond the mere establishment of offers. This avoids the appearance of conflicts of interest Commission model, but it will be more expensive for customers.

The consulting fee model could be based on a fixed fee for a range of services, or an hourly rate. The hourly rate would be particularly useful if the company is positioned as an insurance brokerage and financial advisory services combined.