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Agent/Broker Commissions

Peel Mutual Insurance Company distributes its insurance products through licensed agents and brokers. These agents and brokers are located throughout our area of operation. We consider this to be the most effective method of distribution. Agents and brokers live in the communities that are served by Peel Mutual and they provide the best service available to our policyholders.

COMMISSIONS

We compensate these agents and brokers by means of a commission schedule which is included in our contractual agreement. The schedule is as follows:

• Auto Commission: 12.5% of the policy premium
• Property Commission: 20% of the policy premium
• Profit Commission: This is an agreement that applies equally to all of our agents and brokers. It shares a portion of the insurance operation profit with the agents and brokers and is based upon a formula which takes into account:
  • The change in premiums written compared to the prior year
  • The losses generated from business written with the agent/broker for the year, including adjusting costs
  • The operating expenses, including reinsurance costs, allocated to the agent/broker for the year
• If the calculation generates a profit, 10% of that profit is paid to the agent/broker. If no profit is generated, no payment is made to the agent/broker.
  The calculation is completed at the end of each year. In 2007, a Profit Commission of $184,950 was paid to agents and brokers. This represents 0.66% of Written Premium for 2007.

Total commissions paid to agents and brokers for 2007 were $4,588,259. This represents 16.4% of Written Premium for 2007.

LOANS

Peel Mutual Insurance Company has two outstanding broker loans with a balance of $602,000, to be paid in full by August 2011.