Insurance Journal Forums

Recently I read an article on Contingent Commissions in a national publication. It stated something similar to this: 'Knowing that best practices agencies rely heavily on contingent commissions...' I contacted the publication and the author and asked for proof to justify this statement. Having been in the independent agency business for 40+ years I (as an owner) have never relied on contingent commissions in any way, shape, or form. I would never recommend the owners of any agency rely at all on contingent commissions or budget for them - unless contingent commissions are guaranteed in writing. IMHO they are a gift and the unilateral contract is always subject to modification at any time by the carrier.
So I ask you readers: Do you budget for your contingent commissions? Do you rely heavily on them for needed income? If so, please explain how and why because no one else has offered any valid reasons for what I consider to be a ridiculous position to take regarding contingent commissions. Mind you, my stance is based solely on my limited 40 years experience of owning and managing independent agencies. According to the 'experts', I have been doing something terribly wrong all of these years. Thank you.

I totally agree with you, in theory. Contingent commissions should be treated as a "wouldn't it be nice if we still got that" bonus. Unfortunately with the economy tanking the past few years, more and more of us have had to rely on them just to keep our heads above water. But I never include that income in my budget.