Focusing on ease of doing business, insurers will eschew higher commissions to woo agency business, a new study published by Cincinnati-based Ward Group finds.

The report, Agency Compensation and Management Practices Study, focused on commission practices, agent incentives and other agency management practices from a diverse group of 99 insurance companies. Specifically, plans to lower agent compensation in 2010 outweigh plans to increase compensation by nearly a 3 to 1 margin, the study found. With the distribution channel representing the largest expense component outside of loss payments for most property/casualty insurers, the results are not surprising, said Jeff Rieder, President of Ward Group.

“A common misperception is that companies must pay higher commissions to generate more premium,” Rieder said in a statement. “Top performers focus on ease of doing business and assertive agency management practices to drive new business results. These companies target compensation to be fair, but not excessive.”

Ward also elucidated trends that signify a top performing insurance company. For example, the report found that that top-performing insurance companies achieved 34% more premium than average per agent. Moreover, these insurers have 20% fewer agents per manager than average and are less likely to have separate plans for personal and commercial lines.

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