Omnichannel commissions in insurance companies

Insurance companies currently typically have a function regarding portfolio assignment and portfolio transfer – normally within the scope of the central partner system, the commission system or the policy management system. An object of the policy assignment is the time-related assignment of policies to a broker on the basis of the sales agent contract. The sales agent contract between the insurance company and the hired or independent insurance broker regulates the cooperation, the products to be sold as well as the conditions of commissions.

Different types of commission

The commission conditions include primarily the type of incentives for contracts, the commission rates dependent on, for example, the annual premium from the agreement as well as liability period and reserve rate from the insurance company for the cancellation of the agreement.

The following types of commission exist:

  • Non-recurring commission - this type of commission is used for an activity within the service agreed upon in the agreement, thereby including the acquisition commission as well as a support flat rate.
  • Acquisition commissionthis commission type occurs upon the sale of the product.
    The acquisition commission can be defined as a percentage rate (for example, of the contract value) or as a non-recurring commission with different principles for assessment (including quantity commission). If there are multiple orders within a contract acquisition, the broker receives a so-called follow-up commission. If the customer extends their order, it is an extension commission.
  • The referral fee is referred to as brokerage if related to broker activities.
  • Support and portfolio commission - if a contract runs over a longer period of time, it also requires a certain degree of support by the respective broker, for example, to handle damage claims. The broker receives a commission throughout the duration of the agreement for this support and care for the customer (or the agreement component).
  • Dynamic commission - the amounts of an insurance agreement increase regularly due to compensation for development and inflation. This results in the right to an increase in commission for the broker.

Digression: Hired or independent broker?

For hired brokers, the conditions as well as the obligation to comply with the consultation and documentation obligation for the insurance company in Germany accord to § 6 VVG typically apply with the hiring agreement.

Independent brokers with a difference in

  • the exclusive representative or corporate representative, which according to 92a HGB can only be employed by an insurance company or
  • the multiple-representative in accordance with 84 HGB, who can send agreements to customers for any number of insurances are obligated to consultation and documentation according to § 59 ff. VVG.

Change in assignment: The policy transfer

If there are changes to the sales organization or a broker leaves, there will be a change to the assignment of the agreements to a broker – a portfolio transfer. The agreements are transferred to another broker for further support. The previously independent broker has a right to compensation for the cession of the portfolio according to § 89b HGB. The portfolio transfer can occur at a time in the past or future; at this time of effect, the further incentives and risks (for example, a demand for a return of commission from the insurance company upon cancellation of the agreement or reduction of the premium) will be transferred to the new broker.

Individual or mass mutation

A difference is made between individual and mass mutations corresponding to the number of changes regarding the customers, their data or agreements. Individual mutations upon the beginning or ending of brokers are normally performed manually. Mass mutations, by contrast, occur when there are adjustments or a reorganization to the sales organization. Special applications are needed for this with functions to select relevant customers (or agreements) as well as functions to perform, validate and, if necessary, rework the mutation of the assignments.

An extended framework for policy assignment

If these assignment ideas are consistently followed and embed the incentives for those participating in customer success (contract acquisition) and customer experience in the necessary framework, then an extended framework must be defined from the simple portfolio assignment:

  • Customer assignment: The assignment of a customer to a broker offering support.
    The preliminary phases of the contract acquisition with an identified chance of sales (opportunity) and offer can be provided through assignments. Thus, the responsibility for the customers can be defined in the offer and CRM systems.
  • Business assignment: The business object from the agreement (portfolio assignment) is extended to damage claims and service offers. This means the customer and their satisfaction with the support provided by the insurance company can be placed in the foreground as a basis for the broker and support.
  • Support assignment: In order to ensure expert support quality for customers in the consultation, product selection and offer creation, but also in the event of damage claims or service, often experts are needed for the supporting broker. This assignment is therefore also to be defined explicitly and can thus also be remunerated if the customer is satisfied. A supporter can therefore participate proportionately in the provided services of consultation for contract acquisition or their expertise in support.


Necessary functions of such an extended assignment module include the support of automated assignments on the basis of address data from the customer/business object or on the basis of advanced attributes, such as the customer value. Furthermore, such an assignment module must be a uniform basis for the assignments in the offer/CRM system, in the portfolio management systems as well as for commissions – a clean data basis and integration between the systems must be established for this.

Omni channel commissions: Taking the customer perspective

On the basis of the illustrated advanced assignments, the future ideal approach of incentives would be to identify all participants in the sales and support process and to determine and remunerate their portion from the customers perspective. If the assignments listed above are consistently followed and the business objects of opportunity, offer, agreement and damage/service are linked correspondingly, an assessment and remuneration of all services is correspondingly possible. This type of commission is identified as Omni channel commissions, nevertheless, such an extension is a process of change that requires a long time due to the restriction of actuarial sales costs per product as well as the adjustment of broker agreements.

In the in|sure Ecosphere, we decided to define these assignment functions through a model that ensures the integration functions in consultation, offer and CRM systems and in the portfolio, partner and commission systems from the in|sure Ecosphere or for customer-specific ones or systems from the market.

If you have any questions about this or would like to find out more about the topic, feel free to contact our expert, Carsten Voigtlaender.

Do you have any questions or comments? Then please leave us a comment.

All articles

Are you interested in products of adesso insurance solutions?

You will find here an overview of all software solutions for all insurance lines - for policy management, claims management, claims processing, product modelling or for general digitalisation.

Go to product page