Determine the performance report by adding the commission report plus the loss report. (The commission rate is the commissions that are divided by the written premium.) Use this performance report to determine the percentage of profit bonuses in tables that are an endorsement to the agreement. Then multiply the bonus percentage by the “growth adjustment factor.” (“growth adjustment factor”: the ratio between the written premium for the current calendar year and the written premium for the calendar year immediately preceding. This report should not exceed 2.) Multiply the written premium by the adjusted bonus percentage to determine the profit bonus. Determine the renewal retention index and renewal bonus from the tables. Multiply the percentage of the renewal bonus with the extension bonus to determine the extension bonus. Apply the stabilization report by deriding the sum of all bonuses from all agents/brokers with an interest agreement in effect by the entire written premium of all these agents/brokers. If the stabilization rate is less than 1%, the renewal and profit bonuses are changed by the 1% ratio divided by the stabilization rate. If the stabilization rate is above 2%, the renewal and profit bonuses are changed by the 2% ratio divided by the stabilization rate.

We also believe that the levy for a corporate profit factor is unfair. An incentive agreement should include total earnings, not just the amount of profit that remains after the payment of a certain percentage of operating expenses. Each independent agency owes itself and its final result to review and compare profit-sharing agreements to determine which agreements correspond to the Agency`s business plans and financial objectives. Three companies now have minimum and maximum incentive distributions. Their formulas are expressed in the form of at least 1% and a maximum of 2% of all incentive bonuses, divided by written bonuses (in two of the agreements) or (in one of the agreements) won by all agencies with incentive agreements. For excluded transactions that are not mentioned, positions may be excluded under the income clause or the Outgo plan.