How Life & Health Insurance Agencies Process Commissions in AgencyBloc
Managing commissions is an essential part of any life and health insurance agency.
For many agencies and agents, commissions are the only way they get paid, so the commissions department is paramount to the business's survival. But what does commissions processing look like in an agency management system like AgencyBloc?
In this blog, we’ll discuss how different types of agencies use AgencyBloc to track their commissions, monitor their payments, and create efficiencies in their processes. Specifically, we’ll focus on:
- Single Independent Agents
- Medicare Agents/Agencies
- Life Agents/Agencies
- Agencies Without Downline Agents/Agencies
- Agencies With Downline Agents/Agencies
Regardless of the size of your agency or your product offerings, these are consistent benefits of using AgencyBloc:
Let’s take a deeper look.
Why Independent, Single Agents Use AgencyBloc to Manage Their Commissions
“AgencyBloc makes it easy to track how I’m getting paid. With a few simple clicks, you can see your entire commissions report! AgencyBloc saves me so much time and it’s accurate. NO more missing commissions!!”
—Kay G., Goodemoot Benefits Solutions
The size of your book of business and the number of policies you have will determine your overall need for using a commissions processing tool. If you can efficiently manage your policies in a spreadsheet and have the knowledge to manipulate those sheets accurately, then you may be fine.
However, spreadsheets can quickly become a burden and hindrance to growth.
The more policies you sell, the more commission you bring in. The more commission you bring in, the more you have to manage, track, and analyze. Tracking commissions line by line can be incredibly time-intensive.
Plus, it opens you up to human error. There’s a lot of research stating human error accounts for 70-100% of mishaps, errors, and issues within spreadsheets. So, it’s easy to conceive that the majority of your spreadsheets have at least one error, if not multiple. And if those erroneous spreadsheets are your commission spreadsheets, you may be missing something.
So, what benefits do single independent agents find with AgencyBloc?
Independent agents using AgencyBloc enjoy the improved tracking of their commissions. It gives them a detailed view of what’s coming in, where it’s coming from, and how it’s paying out. Usually, they have their structures set as 100% to the house, meaning they aren’t splitting commissions out.
For single agents using AgencyBloc and tracking their commissions, the goal is sustainable growth. Getting in early and setting up your commission payout structures when you have fewer policies can help save you significant time in the long run.
The other benefit is uncovering missing compensation.
AgencyBloc users run The Commission Not Received report to find missing commission payments. The Commission Not Received report shows any carrier (or upline) compensation that hasn’t been received. It’s a crucial tool in helping you recoup any lost income. We’ve heard from independent agencies that the money they uncover in missing compensation more than pays for their subscription, which is significant.
You can also run a Commission Received by Policy report to see how different policies and product types are paying out. Using this information, you can make accurate determinations about the future of your agency, the products you’ll carry, and what you’ll offer to your clients.
This analysis is essential because it gives you crucial insight that will help you work smarter. Knowing when a product type isn’t performing for you helps you make more informed decisions for the future.
How Medicare Agents/Agencies Use AgencyBloc to Manage Their Commissions
“The commissions feature of AgencyBloc is the best. It's cut my time spent on commissions in half. It's way more efficient.”
—Ashley E., Seniority Benefit Group
Managing Medicare commissions has its own set of rules and needs. Whether you’re an independent Medicare agent or a Medicare agency with downlines, there are benefits to using a system to manage your commissions.
The structure of Medicare payouts can be unique. For example, certain products with some carriers may only pay out once a year. Since the payments can be infrequent (or once annually), you want to be sure they’re correct. You can run the Commission Not Received report here to identify when misses happen.
Additionally, if you sell certain products that have admin fees or other additional revenue that come alongside your actual commission payment, you can still track that income. In AgencyBloc, you can use Revenue Types to identify what you made in commission, bonuses, overrides, etc.
Another crucial piece of the puzzle: the Commission Received by Policy report. Different product types under different carriers in different states will have their own unique payout schedule. Some will pay out for the life of the policy, whereas others will pay out for a specific amount of time (i.e., seven years). Using this report, you can see how a policy is paying out the commissions.
Depending on your agency and day-to-day, you may not immediately notice if one of your policies has finished paying out. Running the Commission Not Received report can identify when a particular policy stops paying.
Ultimately, if you don’t identify this information, it could go on for years, and your monthly income could dwindle without your knowledge.
How Life Insurance Agents/Agencies Use AgencyBloc to Manage Their Commissions
A commissions processing tool like AgencyBloc can make a huge difference for agencies managing life insurance commissions. Like other styles of business, the benefits of tracking life insurance commissions include: finding inaccurate and missed payments, enhanced reporting capabilities, and simplifying the tracking process.
Due to the nature of life insurance, commission payments are ever-changing. Many payout structures include a 9-month advance, then nothing until month 10, and the amount changes each year due to the renewal structure. Additionally, the splits and structures of life insurance commissions can be complex on paper, and running them by hand to ensure accuracy can be time-intensive.
Another factor in life insurance is that it can have an incredibly long sales cycle, so always staying on top of when new commissions are expected and ensuring they’re correct can be difficult.
In AgencyBloc, life insurance clients rely heavily on the rate tables, mainly calculated off of % of premium or % of commission, to ensure their various splits and payout structures are appropriately tracked. Likewise, AgencyBloc’s projection tools help agencies track the projected incoming commission totals to know when their percentages are incorrect by comparing actual commission dollars received versus the expected amount.
Since life insurance commissions can be infrequent and are sometimes significant payments, you want to ensure that the few payments coming in are exact.
How Agencies Without Downline Agents/Agencies Use AgencyBloc to Manage Their Commissions
“We used to track our commissions through Excel, but it was just too cumbersome. We considered building our own software, but in the end, we chose AgencyBloc and it was a very wise decision. It's already saving us money and we're catching things we never did with spreadsheets.”
—Susan B., McIntosh/Booth Insurance
You may see a trend here. Although every agency tracks and breaks down their commission payments differently, the tools they use in AgencyBloc aren’t really all that different.
Like single independent agents, agencies without downlines use AgencyBloc to:
- Simplify the carrier commission import process
- Streamline commission management
- Identify inaccurate and missed compensation (from carriers and uplines)
- Identify products and services that aren’t performing
When it comes to how they set up their rate tables, it’s pretty straightforward. They usually send 100% of the earned commission directly to the house (the agency) or the specific agent. Or they use a basic split, like 50/50, where 50% goes to the agent and 50% to the house.
But, if they have it in their sights to grow and start introducing more complex splits and hierarchy structures, they already have their tool in place and their information loaded to make the transition significantly easier.
The other significant benefit is the ability to uncover missing compensation. This is the #1 benefit regardless of the agency type or size. Every agency from single agents to large FMOs will need to monitor, track, and analyze incoming commission payments to ensure accuracy, so an agency without downlines is no different. We’ve heard from multiple agencies that the money they uncover in missing compensation more than pays for their commission management subscription, which is significant.
You don’t know what you don’t know, and relying solely on the carrier to always be right is not conducive to running a thriving business.
Using AgencyBloc, agencies know for certain when they’re paid appropriately and what is missing. Identifying missing compensation is the biggest differentiator for agencies without downlines; that coupled with the efficiencies in streamlining commission management give agencies more time to focus on other revenue-generating activities.
How Agencies With Downline Agents/Agencies Use AgencyBloc to Manage Their Commissions
“AgencyBloc has drastically reduced my time in processing commissions. The most helpful feature has definitely been the ability to import commissions statement spreadsheets from the carrier. It has saved me hours of manual formatting work! A task that used to take me 4 to 6 painstaking hours with our previous system now takes less than 30 minutes. It is also so much easier to quickly find and fix errors, update splits, balance our monthly commissions, etc.”
—Miranda B., Peters & Milam Insurance Services
Agencies with downlines have many of the same issues as the agency types above, but usually on a larger scale. Therefore, they experience similar benefits to using a commission management system.
However, one of the unique roadblocks agencies with downlines face are hierarchy structures and, sometimes, complex commission payout schemes. In AgencyBloc, agencies with downlines fully utilize the rate tables and payee schedules to make tracking paid out commissions significantly easier. This is nearly impossible to do with spreadsheets as it would be incredibly time-intensive and heavily prone to error.
Another key piece of the puzzle for agencies with downlines is the reporting capabilities. Often, these agencies have a long list of reports they need to run for internal monitoring and for their downlines. Having access to the commission-based reports their downlines need is essential for their customer service and client retention.
“With AgencyBloc, we’re able to take care of our clients, our downlines agents and agencies, as soon as they need anything. We can run the reports they need with data they can rely on.”
—Cristin H., The Brokerage, Inc.
The other significant factor, again, is uncovering missing compensation. Agencies with multiple downline agents and agencies are often getting a part of that commission. If the money coming in isn’t correct, it affects all parties. Large agencies with downlines using AgencyBloc have reported uncovering tens of thousands of dollars in missing compensation from the carriers.
This uncovered money is a significant differentiator for agencies.
Agencies with downlines also use Revenue Types in AgencyBloc to track and manage the different types of revenue received. Agencies categorize these types as:
Using Revenue Types, agencies can better identify what kind of revenue is coming in from carriers for different policies and product types. They can then develop more in-depth analysis that gives them crucial information when planning for the future.
Lastly, agencies with downlines often have extremely large carrier commission statements. Entering one of these statements or going line by line takes a significant amount of time for their commission department.
In AgencyBloc, they use AgencyBloc’s unique mapping and import tools to create efficiencies in the import process. The import and mapping software quickly loads carrier commissions statements into the system, matches policies appropriately, and makes any additional edits/changes obvious to ensure they're fixed.
For many agencies with downlines dealing with large commission statements, this is a huge win. Not only does it save them time, but it also helps them see mistakes and make the necessary changes to make their data more accurate.
AgencyBloc's Best-In-Class Commission Module
AgencyBloc’s Commission Module helps agencies of all types and sizes:
If you want to learn more about how your agency could use AgencyBloc’s Commission Module to streamline your commission efforts and make your processes more efficient, request a one-on-one demo today!
The bottom line: You don’t have to have complex commission payout structures, hierarchies, and many agencies and agents to warrant the need for commission management software. Regardless of your size or product offerings, every agency deals with commissions. Therefore, every agency also deserves the peace of mind knowing that the money you have coming in is correct.
If you’re ready to start looking for commissions software for your agency, here are 7 questions you should be asking your vendor. These questions help you vet your vendors to ensure you’re finding your agency’s best fit in a technology partner.
By Allison Babberl on February 17, 2022 in Commissions Processing
Allison is the Content Lead at AgencyBloc. She manages the creation and schedule of all educational content for our BlocTalk and Member communities. Favorite quote: “Conversation is the bedrock of relationships. Without it, our relationships are devoid of substance.” -Maribeth Kuzmeski More articles