Our Compensation: Guide to How We are Paid
As an insurance broker, Marsh’s role is to place insurance coverage for our clients. We at Marsh Ireland are compensated in a variety of ways, including commissions and fees paid by insurance companies and fees paid by clients. Marsh may receive compensation through one or a combination of the methods listed below.
We are paid in a variety of ways. Payments fall into the following categories.
- Client Service Revenue
- Insurer Revenue
- Other Benefits & Compensation
1. Client Service Revenue
Client Fees and Commission (Sometimes Commission is referred to as Brokerage)
Retail Commissions: A retail commission is paid to Marsh by the insurer as a percentage of the premium charged to the insured for the 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. Retail commission rates can vary from transaction to transaction.
A summary of the commission arrangements we have in place with these parties can be found at: Summary of Commission Arrangements
Client Fees: Some clients may agree to pay Marsh a fee for Marsh’s services in lieu of, or in addition to, retail commissions paid by insurance companies. The fee may be collected in whole or in part through the crediting of retail commissions collected by Marsh for the client's placements.
Our Schedule of Fees and Charges
We receive wholesale broking payments when we are appointed by another (retail) broker who has a direct relationship with a client wanting insurance. The retail broker (which may be another Marsh office) instructs us to approach insurers on behalf of their client.
The payment to us may be a fee or a commission.
We provide a range of consultancy services to clients and, normally we are paid in the form of a fee.
2. Insurer Revenue
Marsh receives compensation from insurers for providing consulting, data analytics or other services. The services are designed to improve the product offerings available to our clients, assist insurers in identifying new opportunities, and enhance insurers’ operational efficiency. The scope and nature of the services vary by insurer and by geography. In the US, Canada and Bermuda, this compensation can be paid in the form of a fixed fee, a percentage of premium, or a combination of both. Outside of those countries, Marsh is compensated for these services through fees.
List of the insurers who pay Marsh Ireland for consulting services
Placement Plus, a specialist business unit within Marsh, earns fees from certain insurers for services that it provides to them. These services include using our expertise to help develop more attractive products for Marsh Ireland clients, ongoing maintenance of the facility, and the provision of analytical reports and management information. These services create additional value for Marsh Ireland clients. The fees that Marsh Ireland earns for these services are not specific to any individual Marsh Ireland client's policies.
- Personal Accident and Travel - Chubb European Group SE
- Property Casualty and Motor – Allianz plc
- Property Casualty and Motor – Aviva Insurance Ireland DAC
- Property Casualty and Motor – Chubb European Group SE
- Property Casualty and Motor ❘ Computer - RSA Insurance Ireland DAC
- Property Casualty and Motor ❘ Incoming Multinational - Zurich Insurance Plc
- Marine Cargo – Munich Re Risk Insurance Solutions Ireland Ltd.
Compensation for Insurer Administration and Other Services
Marsh operates certain panels, facilities, quota shares, line slips and other placement arrangements with insurers. Marsh receives separate compensation relating to the administration and management of these arrangements that is in addition to any other fee or commission earned by Marsh. See above list of our Placement Plus arrangements.
We may receive payments for work we have done on their behalf. This work may include committing an insurer to insuring a risk, producing policy documents and settling claims.
We may also receive payments for risk-management or risk engineering services, marketing, distribution and IT systems.
We never accept commission based only on the volume of business we give an insurer or targets linked to business retention. We may take profit-related commission. If we do, we will tell you this.
3. Other Benefits and Compensation
Marsh may, from time to time, participate in insurance company promotional events or employee training and development provided by insurers. Sometimes, Marsh is reimbursed by insurers for its costs related to promotional marketing. Where legally permitted, Marsh earns interest and other income on premium accounts, as paid to us by the financial institutions where insurance premiums are held prior to remittance to insurers. Marsh Ireland may also be in receipt of non-monetary benefits such as Hospitality of a reasonable de minimis value, such as food and drink during a business meeting or a conference, seminar, or other training event and other minor benefits that are capable of enhancing the quality of the service provided to clients and do not impair the firm’s duty to act in the best interests of the client.
Our Contractual Arrangements with Insurers
Marsh has agreements with certain insurers pursuant to which Marsh provides services to them and for which Marsh is compensated to the extent permitted by law and regulation in each country in which Marsh operates. Examples include captive management services, claims administration services, claims management software and associated services, mergers and acquisitions due diligence services, insurer consulting services, managing general agent and managing general underwriter services and insurance brokerage services regarding insurers’ own insurance programs. Marsh is also party to agreements with insurers that facilitate insurance transactions, including agency agreements, agreements to administer facilities, and agreements to operate internet-based insurance placing facilities.
Marsh also routinely enters into various types of agreements with insurers that are ancillary to the insurance broking process, or other services performed on behalf of clients. Examples include confidentiality and nondisclosure agreements for the release of data relating to insurance placements, claims handling and loss control programs, nondisclosure agreements relating to the development of new insurance products and services, and licensing agreements governing access to and use of data management systems and databases.
For more information on Marsh's compensation or Marsh's contractual arrangements with insurers, please contact your client executive or account representative.