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Compensation Disclosure

PRO Insurance Managers, Inc. is an independent insurance broker specializing in providing comprehensive and cost-effective insurance and risk management services. This disclosure notice is intended to identify the various methods by which we are compensated and how these compensation methods are determined.

Industry Compensation Methods Described

As a practical matter broker (agent) compensation falls into one of three categories: commission, contingency payments and fees. In some circumstances, broker compensation may be a combination of commission and fee based revenue.

Commission

The principal source of revenue for most insurance brokers result from a commission paid by insurance carriers based on the type of coverage and amount of premium. Commission expense is built into the premium charged by the carrier and paid by an insured. Whether premiums are remitted directly to the carrier or to the broker, who in turn remits a net payment to the carrier, the earned commission is a specific percentage of premium. Agreements between brokers and carriers vary so certain brokers may earn a higher rate of commission than others.

Contingents

Often referred to as “contingencies” or “profit sharing” these fees are based on the performance of the broker’s “book of business” with the carrier during any given year. Year-end reconciliation takes into account premium growth and retention with loss experience (not of a single client but the book of business overall) often being the most sensitive factor in determining the amount of contingent (profit sharing) compensation. Such agreements are fairly commonplace among agents & brokers.

Fees

Some agencies bill service fees in addition to commission income, however many states do not permit this practice. As an alternative to commission compensation, fee based agreements negotiated between the insured and broker are becoming more commonplace among medium to large commercial insured’s. Fees associated exclusively with non-commission service items such as loss control and claims analysis are also routine.

PRO Insurance Managers, Inc. Compensation

Carrier paid commission is the principal source of revenue, accounting each year for approximately 85% of agency operating income. Contingency fees (profit sharing agreements) vary from year to year but generally account for about 10% of agency revenue. Consulting and miscellaneous fees make up the balance.

Our Commitment To You

We assure every client and every prospective client that our decisions with respect to placement of your insurance have always been and will continue to be guided by the best interests of our clients.

If you have any questions or if you would like additional information about any aspect of the compensation we earn on your account, please contact us.

We look forward to serving your needs and Thank You for the opportunity. Be sure to visit us often, we’re always improving to serve you better.

DISCLAIMER: Products and services referenced herein may not be available in all jurisdictions. The information and descriptions contained herein are not intended to be complete descriptions of all terms, exclusions and conditions applicable to the products and services, but are provided solely for general informational purposes. Never cancel coverage until advised that replacement coverage is effective.

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