HUB International takes pride in the services our
brokerages provide to you, our client, for insurance brokerage and other
related services. For our efforts we are compensated in a variety of ways,
primarily in the form of commissions and contingency amounts paid by insurance
companies and, in some cases, fees paid by clients or third parties. The means
by which we are compensated are described below.
Commission income - Commission, normally calculated as a percentage of the premium paid to
the insurer for a specific policy, is paid to us by the insurer for the
distribution and servicing of your insurance policy. Our commission is included
in the premium paid by you. The individuals at HUB International who place and
service your insurance may be paid compensation that varies directly with the
commissions we receive. View the Range of
Commission Payable (as a % of Premium) by Major Insurers and Line of Business
to HUB International’s brokerage operations in Ontario, Canada.
Contingency income - We also
receive income through contingency arrangements with most insurers. They are
called “contingent” because to qualify for payment we normally need to meet
certain criteria, usually measured on an annual basis. Contingency arrangements
vary, but payment is normally the result of growing the business by attracting
new customers, helping the insurance company gather and assess underwriting
information, achieving certain loss or claims results and/or working to renew
the policies of existing insureds. There is generally no meaningful method to
determine the exact impact that any particular insurance policy has on
contingency arrangements; however, brokers tend to receive higher contingency
payments when they grow their business and retain clients through better
service. In other words, the amount of earned contingency income depends on the
overall size and/or profitability of a group of accounts, as opposed to the
placement or profitability of any particular insurance policy. For this reason,
the individuals involved in placing or servicing insurance are rarely
compensated directly for the contingent income that we receive. View which insurers pay contingents to HUB International’s
operations in Ontario, Canada.
Supplemental Commissions - Some insurance companies have recently replaced
contingent commissions with supplemental commissions. These commissions, in
fixed amounts, are established annually in advance based on historical
performance measured by criteria comparable to those by which contingent
commissions are calculated. We refer to these commissions as guaranteed
supplemental commissions, or “GSCs”.
Fees paid by clients - On
occasion, with more complex business insurance programs and where additional
resources, products or services are appropriate, a fee may be negotiated for
placement of insurance coverage or additional services. Fees charged for the
placement of insurance will be outlined in a proposal and approved, usually in
writing, prior to the insurer binding coverage. On occasion, we may receive
both commissions and client-paid fees for placing insurance, which
will be disclosed in writing to you in advance. In certain
circumstances clients pay us mutually agreed-upon fees for additional services,
such as third party administration of employee benefits or workers’
Wholesale Operations - We own
wholesale insurance brokerages in both the U.S and Canada. These are
intermediaries through which other brokers, typically retail brokers that have
a relationship and deal directly with their clients, place coverage. Our own
retail brokers may place client policies through HUB-owned wholesale brokers.
In such cases, both the HUB retail broker and the HUB wholesale broker will
earn commissions, and the client’s premium payment is generally not impacted.
Ordinarily, wholesale brokers, whether owned by HUB International or not, are
included in the transaction because they offer products not available through
normal insurance brokerage retail channels that are particularly suitable to a
Other Compensation and Benefits - We may receive revenue or further benefits from our
insurance brokerage activities in other ways, including, but not limited to,
from insurance company promotional events, payments from insurers for
promotional marketing and/or employee training and development, fees or a
percentage of the interest paid to us for the administration of premium finance
contracts, interest paid to us by financial institutions earned on fiduciary or
trust accounts in which we hold your premium payments pending remittance to the
insurance company, and fees paid to us for policy and/or claims administration
and/or loss control services that we provide.
Customer Centric Carriers - We have access to the products and
services of hundreds of insurers; however, we believe our ability to provide
the best combination of products, service, value and ongoing access to capacity
is enhanced by focusing on a manageable number of carrier relationships. These
strategic relationships include many of the most respected national and
regional insurance companies in the insurance industry (the “Strategic
Carriers”). Although we will continue to access our other insurance company
relationships where appropriate, we expect that many of our clients’ insurance
needs may be met through the Strategic Carriers. The Strategic Carriers may pay
us enhanced compensation, which we intend to use in part to invest in
initiatives to improve our ability to serve our customers and to optimize their
insurance buying experience. A portion of any enhanced compensation from our
Strategic Carriers may be used to incentivize our employees to prioritize,
investigate and access the products and services of our Strategic Carriers for
the purpose of consolidating the number of insurance markets with which we
deal, while at the same time addressing the needs of our clients. In limited
circumstances, our employees may serve on boards or committees of these or
other insurers with whom policies are placed. More information regarding our
Strategic Carrier relationships is available upon request from your HUB
International insurance advisor.
Our goal is to be your insurance brokerage of choice.
We know you have many brokerages to choose from, so to earn your confidence, we
hold ourselves to the highest standard of service, a standard reflected in our
written Client Commitment
- we call
it the “The HUB Advantage”. Please continue to explore our website to
learn more about HUB International and how we do business.
Please also feel free to ask any questions about our
compensation generally, or as to your specific insurance proposal or placement,
by contacting your HUB broker or customer service representative directly, or
by calling our client hotline at 1-866-857-4073.
We want you to choose a HUB International broker to be
your insurance advisor and we intend to make your decision an educated one.