An insurance brokerage’s compensation plan impacts nearly everything related to a firm’s strategic goals for growth, profitability, and overall value. A strong compensation model motivates producers to drive new business, supporting organic growth, and can create a competitive edge in attracting and retaining top talent. However, as a firm’s largest expense, it’s important to understand the entire compensation ecosystem across your organization and those changes that can impact success the most.
One of the best starting points for firms looking to measure and optimize their compensation plan is understanding what other firms, especially top-performing ones, are doing. Benchmarking your approach to peers, competitors, and top performers can help you make better long-term salaries, benefits, and overall budget planning decisions.
MarshBerry’s 2024 Insurance Agency & Brokerage Compensation Study reveals what top-performing firms are doing to remain competitive. It includes details about how brokerages structure salaries, commissions, and bonuses and their methodologies for driving maximum revenue and growth. This biennial study, conducted in March 2024, surveyed firms on their 2023 compensation policies, processes, and strategies for roles commonly found across most insurance brokerages and their expectations for 2024.
Study Overview
This study is intended to help brokerages better understand the landscape of total compensation, benchmarks to measure against, and evolving trends. It is broken out across four employee categories:
- Executive and management
- Production personnel
- Service personnel
- Support personnel
Executive & Management
For executives and management, most survey respondents reported that salaries increased in 2023 and were optimistic about further increases in 2024. Remember that executive performance tends to be linked to top-line and profit growth, and 2023 saw strong organic growth and profit margin expansion in the insurance brokerage sector. The respondents’ projections for higher executive compensation in 2024 may also reflect expectations for stable, robust levels of growth for the industry soon.
Production Personnel
Production personnel are segmented into two categories – validated and unvalidated producers – because they are in different stages of their careers and tend to be compensated differently. Validated producers usually generate enough business to validate their compensation (including benefits). Unvalidated producers are typically newer employees (less than three years) and are not generating enough business to cover their compensation.
Compensation for validated producers is often tied to commission and linked to their books of business. However, firms use various compensation methods for these producers, some incorporating a salary.
Service Personnel
In the average firm, service personnel comprise 59% of total personnel and service payroll makes up 39% of total payroll expense. On average, there are 2.8 service staff to every producer. Among the four employee categories, service personnel saw the largest boost in salary in 2023. 83% of respondents report that service personnel salaries were higher in 2023 (compared to 2022) increasing an average of 6%. Additionally, 77% of respondents expect them to increase in 2024.
Support Personnel
Support personnel support the entire organization rather than a specific department. Support functions include accounting and finance, general office management, human resources, and information technology personnel. In 2023, the average firm had approximately 8.6 full-time equivalent (FTE) employees for every one FTE of support staff.
Overall, salaries and bonuses for support personnel increased in 2023. 2024 salaries are projected to increase, while bonuses will remain relatively flat.
The Value of a Compensation Study
MarshBerry’s comprehensive, one-of-a-kind industry report evaluates compensation trends across 35 different roles in insurance brokerage. It provides over 100 charts illustrating respondent data and detailed insights into the results. The report allows insurance brokerages to benchmark where their firm sits in the range of industry peers on compensation approaches. It can reinforce their current approach or reveal areas for change.
As insurance brokerages continue to look for ways to grow their business, whether through their product offerings, service capabilities, or technology upgrades, people will always be at the root of everything they do. Having a top-performing organization with top-performing personnel starts with a top-performing compensation strategy.
Learn more about MarshBerry’s 2024 Insurance Agency & Brokerage Compensation Study.
+MarshBerry 2024 Compensation Study.
