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Placement fees, which are rewards from the insurance carriers paid simply for putting a piece of business with them, create a conflict of interest. HNI does not accept placement fees.

Profit sharing incentives, also known as contingent income, are based on the profitability of a broker’s book of business with a carrier and serve to make the broker even more proactive in trying to reduce our customer’s long-term total cost of risk.

In addition to front-end commissions that HNI typically receives as a percentage of insurance premiums, HNI may earn contingent commissions from individual insurance carriers for whom we act as agents. For HNI’s Property and Casualty Division, contingent income is based primarily upon underwriting profitability and/or premium volumes aggregated for all HNI clients with that carrier. For our Employee Benefit Division, contingent income is based primarily upon membership growth. 

In summary;

  • HNI’s corporate values are the basis of our actions. We built our business by putting the interest of our clients first and never direct business to insurers because of incentives.
  • The majority of HNI’s revenues are collected as commissions that are a percentage of the premium.
  • The historical problems in the industry is that certain brokers allegedly were writing business on a fee basis and then not disclosing the placement fee, which really meant they were getting paid more than the customer understood. In addition, they were manipulating the bid process in order to maximize their income.
  • Contingent income is not guaranteed, however, placement fees are. Again, HNI does not accept placement fees.
  • Book of Business Contingent Income is “contingent” upon certain performance results (profitability, premium size and loss experience) of an agent’s entire book of business over a period of time (usually 1 to 3 years).
  • HNI employees do not share in contingent commission, therefore they can be objective and their number one concern is adding value to the clients.