How Aggregator Commissions Work
When you write a policy through an aggregator, the carrier pays commission to the aggregator (as the agent of record). The aggregator then pays you your share based on the agreed commission split.
Example: You write a homeowners policy with $1,200 annual premium. The carrier pays 15% commission ($180) to the aggregator. With an 85/15 split, you receive $153 and the aggregator keeps $27. On renewal, the same split applies to the renewal commission.
Common Commission Models
Flat Percentage Split
The simplest model: the same split applies to all carriers and all lines of business. Example: 85/15 means you keep 85% of all commission, the aggregator keeps 15%. Pros: simple to understand and predict. Cons: does not account for the higher commission rates on certain carriers or lines.
Graduated Split
Your split improves as your book grows. Example: 80/20 for the first $100K in commission, 85/15 for $100K-$250K, 90/10 above $250K. This model rewards growth and loyalty — the longer you stay and the more you produce, the more you keep. Most large aggregators use some form of graduated scale.
Variable Split by Carrier or Line
Different splits for different carriers or lines of business. You might get 90/10 on personal lines (where base commission rates are lower) and 80/20 on commercial lines (where base rates are higher). This reflects the different economics of each line.
Membership Fee Model
Some aggregators charge a monthly or annual membership fee instead of (or in addition to) a commission split. Example: $500/month flat fee, and you keep 100% of commissions. This model benefits larger producers (the fee is fixed while commissions grow) but can be expensive for new agents with small books.
Beyond the Base Split: Profit Sharing
Profit sharing (contingency commission) is the hidden value in aggregator relationships. Carriers pay bonus commissions when an aggregator's book performs well — typically measured by:
- Loss ratio: Lower claims relative to premium = higher profit sharing
- Premium growth: Year-over-year growth in the aggregator's book
- Retention: Higher retention = more stable, predictable book
The best aggregators share a portion of this profit sharing with their agents. This can add 2-5% to your effective commission rate — a meaningful increase that compounds over your entire book.
What to Compare (Not Just the Split)
A 90/10 split at Aggregator A is not necessarily better than 85/15 at Aggregator B. You need to compare the full picture:
- Base commission rates: Does the aggregator negotiate higher base rates from carriers? A 90% split on a 12% base rate ($108 per $1,000) is less than 85% of a 15% base rate ($127.50 per $1,000).
- Profit sharing distribution: Does the aggregator share contingency commissions? How much?
- Technology costs: Is the AMS, rater, and CRM included or extra? ($300-$600/month matters.)
- E&O group program: Does the aggregator offer group E&O at reduced rates?
- Back-office support: Licensing, compliance, carrier communication — what is included?
- Book ownership: This is non-negotiable. If you do not own your book, the commission split is irrelevant — you are building someone else's asset.
Negotiation Tips
- Always ask for the complete commission schedule — every carrier, every line
- Ask about graduated scales — even if not advertised, many aggregators will offer better splits for larger books
- Ask about profit sharing — specifically, what percentage flows back to agents and how it is calculated
- If bringing an existing book, use it as leverage for a better starting split
- Compare net compensation (commission minus all fees and costs) across aggregators, not just the split percentage
- Read the agreement carefully — look for hidden fees, volume requirements, or penalties
The Long-Term View
Commission structure matters, but it is one of several factors. The aggregator that helps you write $500K in commission at 85/15 is far more valuable than the aggregator offering 95/5 but providing no support, no technology, and limited carrier access. Focus on total earnings potential — not just the split percentage.