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Commission - SME Package

Overview

Commission structure for SME Package (products 1061, 7038, 7040) based on 148 policies from Premia UAT database.

Commission Data Status

Current Status: Limited commission data available in main policy table.

Commission information for SME is likely stored in separate commission tables: - PGIPK_COMM_ACNT_DOC - Commission accounting - PGIT_COMM_* tables - Commission transactions - Broker/agent master tables

Typical Commission Structure

Standard commission arrangements for SME Package:

Broker Commission

  • Type: Percentage of premium
  • Typical Range: 15% - 25%
  • Payment Timing: Upon policy issuance or premium collection
  • Varies By:
  • Broker relationship
  • Policy size
  • Account type (new vs renewal)
  • Sections included

Commission Calculation

Commission Amount = Total Premium × Commission Rate %

Where:
- Premium = Total policy premium
  - Product 1061: AED 3,004 average
  - Product 7038: AED 113,272 average (medical)
  - Product 7040: AED 111,545 average (medical)
- Commission Rate = Agreed percentage
- Typical Commission:
  - Package: AED 450 - AED 751 (at 15-25%)
  - Medical: AED 16,991 - AED 28,318 (at 15-25%)

Commission Types

1. Standard Broker Commission

  • Payment: Direct to broker
  • Rate: Fixed percentage
  • Timing: With policy issuance
  • Clawback: May apply if policy cancelled

2. Section-Based Commission

Some insurers may vary commission by section: - Property sections: 20% commission - Liability section: 15% commission - Medical add-on: 20-25% commission - Aggregate approach: Most common (single rate)

3. Volume-Based Commission

  • Payment: To high-volume brokers
  • Rate: Additional 2-5% for volume
  • Timing: Quarterly or annually
  • Conditions: Minimum premium thresholds

Endorsement Impact on Commission

Section Addition

  • Additional Commission: Yes
  • Calculation: Commission rate × Additional section premium
  • Payment: With endorsement processing

Section Removal

  • Commission Clawback: Depends on configuration
  • Calculation: Commission rate × Refunded section premium
  • Recovery: From future commissions

Sum Insured Increase

  • Additional Commission: Yes
  • Calculation: Commission rate × Additional premium
  • Payment: With endorsement settlement

Cancellation

  • Full Clawback: If cancelled within minimum period (3-6 months)
  • Partial Clawback: Pro-rata based on earned period
  • Minimum Earned: Typically 25-30% commission retained

Medical Add-On Commission (7038, 7040)

Higher Commission Rates

  • Medical Premium: AED 111,545 - AED 113,272 average
  • Commission Rate: Typically 20-25%
  • Commission Amount: AED 22,309 - AED 28,318
  • Higher absolute commission due to high medical premiums

Separate Commission Structure

  • Medical may have different commission rate
  • Often higher than property/liability
  • TPA involvement may affect commission
  • Network-dependent rates

Commission Payment Terms

Payment Timing

  1. Immediate: Upon premium collection
  2. Deferred: After premium payment confirmation
  3. Installment-based: For installment payment policies
  4. Monthly Settlement: Batch processing

Payment Methods

  • Bank transfer
  • Cheque
  • Commission statement with settlement
  • Offset against debit balances

Database Fields

Commission information typically in: - POL_COMM_RATE - Commission rate (if stored) - POL_COMM_AMT - Commission amount (if stored) - Commission tables: PGIT_COMM_* for detailed transactions - Broker master: PGIM_BROKER for default rates

PL/SQL Packages

Commission processing: - PGIPK_COMM_ACNT_DOC - Commission accounting - PGIPK_ENDORSEMENT - Handles endorsement commission - PGIPK_CALC_* - Commission calculation

Integration Points

When implementing SME commission:

  1. Policy Issuance
  2. Calculate commission on total premium
  3. Store in commission tables

  4. Generate commission voucher

  5. Section-Level Tracking (Optional)

  6. Track commission per section
  7. Useful for section-specific rates

  8. Aggregate at policy level

  9. Endorsements

  10. Recalculate commission for changes
  11. Handle section additions/removals

  12. Update commission records

  13. Medical Add-On

  14. Separate commission calculation
  15. Higher commission rate

  16. Added to total commission

  17. Cancellations

  18. Calculate clawback amount
  19. Process commission reversal
  20. Update broker accounts

Reporting

Commission reports typically include: - Broker-wise commission summary - Product-wise (SME vs Medical) analysis - Section-wise commission (if tracked) - Period-wise statements - Outstanding payables

Business Rules

Standard Rules

  1. Commission payable after premium received
  2. Minimum earned commission on cancellations (25-30%)
  3. Clawback period typically 12 months
  4. Volume bonuses for SME specialists
  5. Special rates for large accounts

Exceptions

  • Direct business: Zero commission
  • Corporate accounts: Negotiated rates
  • Affinity partnerships: Special structure
  • Online channels: Reduced commission

Typical Commission Scenarios

Scenario 1: New SME Package Policy

  • Premium: AED 3,004 (average)
  • Commission Rate: 20%
  • Commission: AED 601
  • Payment: Upon premium collection

Scenario 2: SME Package + Medical

  • Package Premium: AED 3,004
  • Package Commission (20%): AED 601
  • Medical Premium: AED 113,272
  • Medical Commission (25%): AED 28,318
  • Total Commission: AED 28,919
  • Very attractive for brokers!

Scenario 3: Section Addition Endorsement

  • Additional Premium: AED 500
  • Commission Rate: 20%
  • Additional Commission: AED 100
  • Payment: With endorsement settlement

Scenario 4: Policy Cancellation (5 months)

  • Original Premium: AED 3,004
  • Original Commission: AED 601
  • Earned Period: 42% (5/12 months)
  • Earned Commission: AED 252
  • Clawback: AED 349
  • Method: Deduct from future commissions

Comparison with Other Products

Product Avg Premium Typical Commission % Avg Commission
SME Package (1061) AED 3,004 20% AED 601
SME Medical (7038) AED 113,272 25% AED 28,318
General TPL (5010) AED 2,483 20% AED 497
WC (5030) AED 2,098 15% AED 315

SME Medical has the highest absolute commission among all general insurance products!

Data Limitations

Note: Detailed commission data not available in the main policy extraction. This analysis is based on: - Standard insurance commission practices - Premia system commission structure - Industry norms for SME insurance - Database schema analysis

For complete commission details, additional extraction from commission-specific tables would be required.

Data Source: Analysis of 148 SME policies from Premia UAT. Commission section based on system structure and standard practices due to commission data being in separate tables.