Compensation Disclosure Policy
This disclosure is intended to help you better understand certain terms of compensation we get and so that we can comply with State Insurance Statutes. However, it is Confidential and specific to our business. Use of this information outside of your entity or for any unintended purpose could be harmful to our organization. Therefore, we expect and appreciate that you will respect its confidentiality.
Smith Brothers Insurance, Inc. takes very seriously our role as a trusted advisor to our clients. Our compensation is largely made up of commissions paid by insurers but, in some instances, we collect a fee for these services. Commissions are part of the premium quoted. We do have arrangements with a number of insurance and financial service companies that provide additional commission or compensation to us for joint advertising efforts, training and professional development of our staff, and growth and profitability of our overall book of business. In addition, these carriers may provide Smith Brothers with other non-monetary benefits such as travel, education, financing and entertainment. This additional compensation typically represents less than 1% of the total premium handled in our office. These terms of compensation are not specific to your account and do not directly affect the pricing of your account.
Smith Brothers is collecting a fee from you, the client, on certain policies for insurance services provided, in lieu of commission paid by the carrier(s). Smith Brothers may also have profit sharing agreements with the carriers we are showing you as alternatives, with which we have the opportunity to earn potential additional compensation to Smith Brothers based on our total premium volume, production, and loss ratio.
There is no way of knowing the value of the profit sharing or non-monetary compensation until after our book of business calendar year results have been calculated. Based on history and existing contractual agreements, Smith Brothers’ estimates of compensation on these agreements, as a percentage of our overall book of business, is based on historic averages by carrier, with an average of less than 1% on our overall book of written premium, but they range from 0% - 4% of written premium depending on the carrier.If you would like additional details as to how we earn additional compensation through these profit-sharing arrangements, we would be happy to share them with you, including copies of the actual contracts.