Compensation in the insurance industry is about more than just commissions—it’s about leveraging every available revenue stream. For independent insurance agencies, understanding The Five Layers of Agency Compensation can be the difference between getting by and thriving.
1. Commissions: The Foundation of Insurance Agency Revenue
The first and most familiar layer is commission. While every agency earns commissions, the payout levels vary. When available, partnering with SIA of NC provides independent agencies access to higher commission structures through strategic carrier partnerships.
Larger agencies often receive better commission rates, but by collaborating within a larger network like SIA of NC, independent agencies can tap into those higher-earning opportunities—earning more for the same business they’re already writing.
2. Portfolio Management Service Fees (PMSF): A Recurring Bonus Stream
Beyond commissions, SIAA’s quarterly Portfolio Management Service Fees (PMSF) provide another lucrative revenue stream— think of these incentives as quarterly ‘I love you’ bonusespaid by national carrier partners for both new and renewal business.
3. Local & National Growth Incentives: Strategic Revenue Boosters
The third layer includes growth and retention incentives that reward agencies for aligning their book of business with strategic carrier partners. Whenever possible, we strive to mirror our national PMSF programs at the local and regional levels, ensuring agencies benefit from consistent and competitive incentives. Although not always identical, SIA of NC often negotiates additional local incentives that enhance earning potential. These incentives include:
- Quarterly guaranteed bonuses
- Local & regional new business incentives
- Retention-based bonuses
4. National Profit Sharing: Unlocking Contingency Earnings
All members are eligible for annual profit-sharing overrides from $1 as long as they have a direct carrier relationships and a loss ratio below 60%
Whether an agency has $25,000 or $1.5 million in written premium, they gain access to contingency earnings.
- Unlike traditional profit sharing that only rewards larger agencies, SIA of NC members can benefit from national profit-sharing opportunities, regardless of volume.
5. Local Profit Sharing: Doubling the Profit Potential
In addition to national agreements, all members with a direct carrier relationship are eligible for local profit-sharing opportunities. By partnering with SIA of NC, agencies can stack local and national profit-sharing earnings—maximizing revenue potential in ways that wouldn’t be possible independently.
For many independent agencies, this means more cash flow to reinvest in:
- Staff hiring & development
- Technology upgrades
- Community reinvestment
- Overall business expansion
Maximizing Your Compensation Strategy
In today’s fast-evolving insurance industry, these five layers of agency compensation empower independent agencies with greater financial flexibility, long-term stability, and expanded growth potential.
If you’re an independent agency owner, now is the time to evaluate whether you’re fully leveraging these compensation strategies.
For a direct explanation of these key revenue opportunities, watch Matt Masiello’s video on 5 Ways to get Paid.
SIA of NC is a Master Agency of 
. Learn more about the SIAA Model: SIAA Model | Insurance Agency Network & Alliance | SIAA