Rewards Programs

Property/casualty insurance companies continue to offer incentives programs to insurance agencies for production of business which are typically called contingent commissions or contingent compensation.  After the Sptizer investigations insurers have been careful and responsible in offering these incentives, and most of the programs are very general production based incentives.  These incentive programs provide additional compensation to an agency for the performance of the book of business that the agency places with the insurer, primarily based on volume and/or profitability.  Some, however, are more direct.

The most direct we have seen is a program providing the account executive (personally) with a $25 gift certificate for each new account written.  These types of personal rewards programs have all but disappeared post Sptizer, but we recently received the following solicitation:

Treat yourself to a DVD player or an iPod; a Coach bad or diamond jewelry…

This program was based on new production, and the reward was paid directly to the account executive for specific accounts written.  We would think that insurers would be more careful these days as we don’t think this type of approach is in the best interest of the client.