Our commitments and how we are paid
Mercer Marsh Benefits (“MMB”) provides clients with a single source for managing the costs, people risks, and complexities of employee benefits. It is a combination of Mercer and Marsh, global leaders for innovative and reliable health and benefits advice strategic solutions, and brokerage services.
We pride ourselves on being an industry leader in transparency and disclosure, and we make the following commitments when working for our clients:
- We engage in ethical business practices
- We define with our clients the terms of our engagement, including our role and responsibilities
- We make available to our clients on request, and subject to local law and practices, our compensation from insurers and other third parties and our interests in the services we provide our clients
- We manage conflicts of interest with integrity and our clients’ interests come first
Our commiments are applied throughout MMB globally. How we are compensated and the nature of our disclosure may differ according to the services we provide and will always be done in accordance with local law and practices.
This Global Transparency and Disclosure Statement summarises the types of compensation received across MMB globally. There may be countries that either do not receive certain of the compensation types noted below due to local practices or restrictions under local law and regulation. Accordingly, please consult your local MMB consultant for information related to a specific entity.
Broadly, MMB offers a wide range of services to its clients, with a variety of compensation arrangements with clients and insurers, including one or a combination of:
- Fee arrangements
- Commissions
- Insurer services revenue
- Other forms of compensation
1. Fee arrangements
Some clients agree to pay a fee to MMB for the services it provides instead of, or in addition to, any commissions MMB receives from insurance companies. Fee amounts will be agreed with clients and included in the contract for services entered into between MMB and client at the outset of the engagement.
2.a. Retail Commissions
Retail commissions are paid to MMB by insurers based on a percentage of the premium charged to the client for its insurance policy. The amount of commission may vary depending on a number of factors, including the type of insurance product sold and the insurer selected by the client, and commission rates may vary from transaction to transaction and change from time to time.
2. b. Alternative Commissions
MMB may receive different types of commission from insurers in addition to retail commissions and/or fee (paid by the client) as follows:
- Additional Retail Commissions: MMB may negotiate additional retail commissions with insurers for certain types of placements at the start of the year or a specific period, and they are fixed for the duration of that year/specific period.
- Threshold Commissions: MMB may also negotiate commissions (may be referred to as contingent or supplemental commission) at the start of the year or a specific period which are earned only when MMB meets an agreed threshold based on volume, retention, and / or growth of the relevant portfolio.
- Implementation Fees: commission structured differently across time, i.e. the first year % of commission is typically higher (in lieu of business acquisition costs for the broker), and in subsequent years it drops to a lower level or zero. Also referred to as “Distribution Fees” in the Belgian market.
Additional information about MMB’s insurer commission arrangements are available to MMB clients on request to MMB.
3. Insurer services revenue
MMB receives compensation from insurers for specific portfolio-related services delivered by MMB (or MMB’s representatives), in some cases by dedicated teams. These insurer relationships are documented in formal service agreements. Depending on the services, MMB may receive fee-based compensation or compensation that is set as a percentage of premium.
MMB earns three types of compensation associated with the different forms of services provided to insurers as follows:
- Insurer Consulting Compensation: MMB’s insurer consulting team may provide a range of consulting and data analytics services to insurers designed to improve the product offerings available to MMB policyholders, assist insurers in identifying opportunities, and enhance insurers’ operational efficiency. Compensation for these services is by fixed fee only – MMB’s insurer consulting compensation arrangements do not include percentage-based compensation, discretionary components, bonuses or variable elements.
- Insurance Solutions Compensation: MMB may create, manage and/or administer certain panels, portfolio facilities, quota shares, line slips and delegated authorities and participating insurers may compensate MMB for the activities MMB carries out for or on their behalf by way of a fixed fee and/or on a percentage of premium basis.
- Work Transfer Compensation: MMB may receive compensation from insurers for administrative work that MMB does for or on their behalf, including where MMB assists with policy servicing, claims, and placement execution (which is unrelated to the work MMB carries out as broker, and for the avoidance of doubt, MMB will not receive compensation twice for the same service).
Additional information about MMB’s insurer services compensation arrangements are available to MMB clients on request to MMB.
4. Other forms of compensation
MMB may also receive other forms of compensation including the following:
- MMB may, from time to time, participate in insurer sponsored promotional events or employee training and development, and sometimes MMB is reimbursed by insurers for costs related to promotional marketing
- Additionally, in the process of handling clients' money we may earn interest on, or benefit from, investment income or exchange rates. We also receive payments from the companies that provide premium finance facilities to allow our clients to pay their premiums in monthly instalments
- In certain countries MMB may also enter into referral arrangements with third parties (including insurers) to refer clients to these third parties for their provision of products or services, and MMB may receive referral fees for this.
5. Requesting details of how we are paid
Clients of MMB may obtain further details of how we are paid by making a request to their usual MMB contact.
How we are compensated and the level of information we can disclose may change according to the services we provide and in accordance with local law and practices.
6. Related Party Transactions
We and our subsidiaries or affiliates own shares in and have contracts with certain insurers and reinsurers. We also own or have interests in other insurance-related businesses that may provide services associated with a client's account.
If you have any questions about MMB’s transparency and disclosure commitments, or would like information on the compensation we receive, please do not hesitate to contact your MMB client contact.