Contingency Pay is Critical for Survival, N.C. Agents Reminded

Wrongdoings by mega insurance brokers have triggered a discussion that contingency commissions are bad, yet those contingency commissions can make or break a typical independent agency, an agent leader told North Carolina agents.

“Half of all agencies in the U.S. depend on the extra amount of income brought in by contingency commissions to move profit and loss records from red to black,” Alex Soto, a Miami agent who is president of the Independent Insurance Agents and Brokers of America, told a recent gathering of North Carolina agents.

“It determines whether we are profitable or not,” Soto said.

Soto spoke at the Independent Insurance Agents of North Carolina annual convention in Asheville this week. He also recently testified in front of the U.S. Senate concerning contingency commissions and the hot topic of earnings disclosure.

The multi-day IIANC event highlighted several speakers and a national level trade expo featuring 64 exhibitors.

IIANC President William “Bill” Bingham presented three North Carolina universities with checks for $30,000 each. The University of North Carolina at Charlotte, Western Carolina University and Appalachian State University were the grateful recipients – part of a $480,000 pledge made by IIANC to enhance the state’s higher education system and educate future insurance industry members.

Ray Thomas, former CEO of Zurich North America Small Business, was keynote speaker.

“As independent insurance agents, you write 80 percent of all commercial lines in the United States,” Thomas told the audience of nearly 500. “This is a $467 billion industry – the underpinning of the U.S. economy.”

Thomas said an agent’s ability to understand each generation’s potential customer base is the key to building a successful business: “Make sure you’re paying attention.”

For more o the IIANC meeting, see the Oct. 23 Southeast edition of Insurance Journal magazine