# Contingent commissions

A term used when buying insurance agency.

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

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.

Part of: Buying an Insurance Agency (https://searchspheresource.com/guides/buying-an-insurance-agency)

Source: https://searchspheresource.com/guides/buying-an-insurance-agency/terms/contingent-commissions
Not dated: The same editorial definitions as the glossary, inside a trade.

Site index for machines: https://searchspheresource.com/llms.txt