Contingent commissions

Definition

Bonus commission a carrier pays for a book that is profitable and growing, on top of the base.

Why It Matters

They can be a large and volatile slice of profit, set by a formula the agency does not control and a loss year nobody predicted. Normalize earnings before applying a multiple: three years of contingents averaged is a defensible number, and the best single year is not. Ask which carriers pay them, on what terms, and whether the qualifying volume depends on a relationship the seller holds personally.