What Is a Commission Split?
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A commission split is the share of the agency's commission that goes to the producer who wrote the sale.
What it is
The carrier pays your agency a commission, a percent of the premium. The agency then pays the producer a split of that commission, and keeps the rest.
Producer's pay = agency commission × split. Bonuses, if the plan has any, come on top.
A worked example
Example. A customer pays $1,200 for auto. The carrier pays the agency 12%: $144. The producer's split is 30%, so they earn $144 × 30% = $43.20, and the agency keeps $100.80.
New business and renewals
Most plans pay a lower split on renewals than on new business. Winning a new customer is the producer's work; keeping one is often the service team's.
MarshBerry's 2024 Insurance Agency & Brokerage Compensation Study found splits "averaging an 11-12% difference across business lines" between new and renewal business, and says higher-performing firms push that difference "closer to 15-20%" (MarshBerry, July 2, 2024).
What moves a split up or down
- Who brought the lead: a producer's own referral often earns more than a lead the agency paid for.
- Who services the policy: if a service rep does the ongoing work, the producer's share is often lower.
- Tenure: many agencies raise splits as producers prove themselves.
- Product: each line has its own carrier rate, so each often has its own split.
- Who owns the book: a producer who can take their customers when they leave usually gets a bigger share.
Put the splits in a written plan, and start any change on a future date, never on sales already written.
How Producify works it out
In Producify you assign each person a commission plan: anyone without a plan is listed under Unassigned Members, and their sales earn no commission until you assign one.
A plan pays a base rate on each product line, either a percent of the premium or a flat amount per policy, and you can add bonuses on top. To pay a split, enter it as a percent of premium: a 30% split of a 12% carrier rate is 3.6%.
Differs by business type adds an exception, such as Auto at 8% except Added business at 4%. See Build a commission plan.
Frequently Asked Questions
Is there an industry-standard split?
No single one. Splits differ by product line, by who brought the lead and by who services the policy.
What's the difference between a split and a commission rate?
The commission rate is what the carrier pays the agency, such as 12% of premium. The split is what the agency pays the producer, such as 30% of that 12%.
Do splits apply to bonuses?
No. A split applies to the base commission on each sale. Bonuses are paid on top, by their own rules.
Pay each person at their own rates
In Producify, a sale is paid at the most specific rate in the plan that fits it.
Producify is commission tracking software for independent and captive insurance agencies.