Wisdom & Commission Transparency | Ep7
Craig Heatherly
Helping middle-market business leaders buy insurance through long-term strategies | Leadership podcast host
Leadership Insights – What Advice Would You Give to a Younger You?
Be curious. When we’re younger, we often feel the need to prove ourselves by having all the answers. If I could go back, I’d remind my younger self: “You don’t need to know everything.” Embrace curiosity, ask more questions, and view criticism not as a personal attack but as an opportunity to grow and learn. - Brad Sytsma, Partner at McKinnon Leadership Group
Value relationships—they’re what life is all about. The key to any success I’ve achieved in my career lies in the connections I’ve built along the way. Invest in relationships, nurture them, and recognize their true importance. They’re the foundation of both personal and professional growth. - Chuck Freeby, Co-Founder of Sports Michiana
Don’t chase the money. Early in my career, I was focused on climbing the ladder and earning more, thinking that was the best way to provide for my family. But as I’ve grown, I’ve come to realize it’s all about the relationships. Success naturally follows when you work hard and prioritize connections. The culture you build and the legacy you leave behind matter far more than the paycheck. - Spencer Lutz, President American Millwork LLC
Book Recommendation – Never Split the Difference by Chris Voss
Conflict brings out truth, creativity, and resolution.
Christopher Voss is a former international FBI hostage negotiator, in this book he reveals his battle-tested strategies for high-stakes negotiations.
The Five Key Principles of Effective Negotiation
Start with Listening Build trust by focusing on the other person. Validate their emotions, create a safe space, and make the conversation about them to pave the way for meaningful dialogue.
Leverage Mirrors Repeat key words or phrases to foster connection, keep the conversation flowing, and uncover the other side’s strategy while buying yourself time to think.
Practice Tactical Empathy Understand and address the emotional barriers that could block agreement while identifying the emotional levers that can move discussions forward.
Use Labels Effectively Acknowledge emotions by naming them. This approach builds rapport without probing into areas you’re unfamiliar with, deepening the connection.
Embrace “No” View a “no” as an opportunity to clarify priorities. It helps both parties eliminate what doesn’t work and focus on what truly matters.
How Do Insurance Agencies Get Paid? A Transparent Look at Commissions
Two weeks ago, I sat across from a prospect and broke this down.
Let’s simplify how it works:
What is a Commission? Insurance companies (Travelers, Hartford, Chubb, etc.) pay brokers a percentage of your premium as commission for managing your insurance program. This is already part of your premium—no extra charges.
How Much is the Commission? Commission rates vary:
5%-7% for common coverages like Workers’ Compensation.
Up to 20% for specialty coverages.
For a $200,000 insurance program, the average commission (11%) would be $22,000 paid to the agency.
Does the Commission Affect Your Premium? No. The commission percentage is standard and doesn’t vary by agency, so whether you work with Gibson or another broker, the premium remains the same.
What About Fee-Based Compensation? In some cases, larger companies with complex programs (e.g., multi-state operations, loss-sensitive policies) prefer to pay their broker a separate fee instead of commission. This is common for companies with advanced risk management needs, but most middle-market businesses operate on a commission basis.
Why Does This Matter? The key question is: If the agency is earning $22,000, what are you getting for it?
And here’s another: How is your agent incentivized—are they equally focused on retaining your business or just chasing new clients?