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An Analysis of Contingent Commission Use by Property–Liability Insurers
Author(s) -
Colquitt L. Lee,
McCullough Kathleen A.,
Sommer David W.
Publication year - 2011
Publication title -
risk management and insurance review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.386
H-Index - 16
eISSN - 1540-6296
pISSN - 1098-1616
DOI - 10.1111/j.1540-6296.2011.01197.x
Subject(s) - commission , actuarial science , liability , contingent liability , business , payment , liability insurance , property insurance , property (philosophy) , economics , insurance policy , casualty insurance , finance , debt , philosophy , epistemology
The payment of contingent commissions in the property–liability insurance industry has long been commonplace, but recent events have made the practice highly controversial. Even prior to these events, wide variation existed among insurers in their use of contingent commissions. In this article, we examine the determinants of whether or not an insurer chooses to pay contingent commissions at all, as well as the determinants of the extent of their use for those insurers that pay them. We find a number of variables that have a significant relation to the use and extent of use of contingent commissions.