Glossary · Insurance agency commissions
Producer split
A producer split is the share of an agency’s commission on a policy that the agency pays to the producer who wrote or services it, as set out in the producer’s agreement.
What it means
Splits vary widely by agency. Many agreements pay a higher share on new business than on renewals, and some exclude house accounts, fees or contingent commissions. The split is normally a share of the agency’s commission, not a percentage of premium.
Because the producer’s pay is calculated from what the agency receives, a carrier error flows straight into producer pay unless someone catches it first.
How it shows on a commission statement
Producer splits never appear on carrier statements. They are calculated afterwards, in the AMS or the agency’s own records, from the commission received. Chargebacks typically flow through to the producer too, under the producer agreement.
Example
- Premium
- $5,000.00
- Agency commission at 15%
- $750.00
- Producer split, new business 40%
- $300.00
- Agency keeps
- $450.00
Common mistakes to check
- Paying producers on expected commission when the carrier hasn’t paid it yet, or never does.
- Not passing through corrections when an underpayment is recovered.
- Applying the new business split to what the carrier paid as renewal.
- Unclear terms on chargebacks after a producer leaves. That is a matter for your agreements.