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Compensation Disclosure -
Richard A Maloy, Jr.
Chairman and CEO, Maloy Risk Services, Inc.
Over the past two years contingent commissions have been headline news in the insurance industry. This form of compensation from insurers to their sales force (the independent broker) has been around for almost 50 years. These “contingent commissions” in the past were based on the success of an insurance broker with an insurer in three areas: profitability, growth and retention. These set metrics, if not met during the course of the year would either lower or wipe out any such additional compensation with that insurer. A particularly good year would result in a profit check for good performance. These payments were never guaranteed until the year was over.
In 2008 the insurers have changed the model so that a set percentage based on the prior year’s performance metrics determines the additional compensation percentage for the coming year. We now know our additional compensation and can disclose that to you. Maloy is currently involved in three such contracts with the following insurers. The additional compensation is calculated at the end of the year based on the volume of business with that insurer in certain product lines.
- Chubb Insurance Group:
6.5% for all commercial lines of business other than Surety Bonds and Accident.
- Travelers Insurance Group:
2.25% for all commercial lines of business less Professional Liability (E&O)
- Hartford Insurance Group:
2.86% for middle market commercial and 1.95% for small commercial business. Professional, Directors and Officers, Crime, Fiduciary, Employment Practices are all excluded lines of business.
Since none of our individual client account managers or sales representatives are compensated with incentive commissions, they are not enticed to place business with one carrier or another. Contingent commissions are bottom line operational payments to the company with no allocation to those who may be influenced otherwise. Our employees are licensed professionals whose sole responsibility is to place the best coverage with the appropriate insurer. Our specialty in Technology, Life Sciences, Hedge Funds and Private Equity dictates our placement of coverage more so than any other factor.
We thank you for your business and look forward to continuing to serve your needs. Do not hesitate to contact me directly if you have further questions.
Regards,
Richard A. Maloy, Jr. CIC, CRM
CEO and Chairman |
