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Commission - Workmen Compensation

Overview

Commission structure for Workmen Compensation (product 5030) based on 2,555 policies from Premia UAT database.

Commission Data Status

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

Commission information for WC 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 Workmen Compensation:

Broker Commission

  • Type: Percentage of premium
  • Typical Range: 10% - 20%
  • Payment Timing: Upon policy issuance or premium collection
  • Varies By:
  • Broker relationship
  • Policy size
  • Account type (new vs renewal)
  • Negotiated agreements

Commission Calculation

Commission Amount = Premium × Commission Rate %

Where:
- Premium = Final policy premium (AED 2,098 average)
- Commission Rate = Agreed percentage
- Typical Commission = AED 210 - AED 420 per policy (at 10-20%)

Commission Types

1. Standard Broker Commission

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

2. Renewal Commission

  • Payment: On policy renewal
  • Rate: May differ from new business
  • Timing: Annual renewal
  • Conditions: No lapse in coverage

3. Volume-Based Commission

  • Payment: To high-volume brokers
  • Rate: Additional percentage for volume
  • Timing: Quarterly or annually
  • Conditions: Minimum premium thresholds met

Endorsement Impact on Commission

Wage Roll Increase

  • Additional Commission: Yes
  • Calculation: Commission rate × Additional premium
  • Payment: With endorsement processing
  • Example: Wage increase from AED 100K to AED 150K adds premium, adds commission

Wage Roll Decrease

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

Cancellation

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

Commission Payment Terms

Payment Timing

  1. Immediate: Upon premium collection (cash policies)
  2. Deferred: After premium payment confirmation
  3. Installment-based: For policies with installment payments
  4. Monthly Settlement: Batch processing of all commissions

Payment Methods

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

Database Fields

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

PL/SQL Packages

Commission processing: - PGIPK_COMM_ACNT_DOC - Commission accounting and documentation - PGIPK_ENDORSEMENT - Handles endorsement commission impact - PGIPK_CALC_* - Commission calculation packages

Integration Points

When implementing commission processing:

  1. Policy Issuance
  2. Calculate commission at policy creation
  3. Store in commission tables

  4. Generate commission voucher

  5. Premium Collection

  6. Trigger commission payment process
  7. Update broker account

  8. Generate payment advice

  9. Wage Roll Adjustments

  10. Recalculate commission for changes
  11. Handle additional/refund commission

  12. Update commission records

  13. Cancellations

  14. Calculate clawback amount
  15. Process commission reversal
  16. Update broker accounts

Reporting

Commission reports typically include: - Broker-wise commission summary - Product-wise commission analysis - Period-wise commission statements - Outstanding commission payables - Commission clawback tracker

Business Rules

Standard Rules

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

Exceptions

  • Direct business (no broker): Zero commission
  • Corporate accounts: Negotiated rates
  • Government entities: May have special terms
  • Online channels: Reduced commission rates

Typical Commission Scenarios

Scenario 1: New Policy Issuance

  • Premium: AED 2,098 (average)
  • Commission Rate: 15%
  • Commission: AED 315
  • Payment: Upon premium collection

Scenario 2: Wage Roll Increase Endorsement

  • Additional Premium: AED 500
  • Commission Rate: 15%
  • Additional Commission: AED 75
  • Payment: With endorsement settlement

Scenario 3: Policy Cancellation (4 months)

  • Original Premium: AED 2,098
  • Original Commission: AED 315
  • Earned Period: 33% (4/12 months)
  • Earned Commission: AED 104
  • Clawback: AED 211
  • Method: Deduct from future commissions

Comparison with Other Products

Product Avg Premium Typical Commission % Avg Commission
WC (5030) AED 2,098 15% AED 315
General TPL (5010) AED 2,483 20% AED 497
Professional Indemnity (5050) Variable 15-20% Variable

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 WC insurance - Database schema analysis

For complete commission details, additional extraction from commission-specific tables (PGIT_COMM_*, PGIPK_COMM_ACNT_DOC) would be required.

Data Source: Analysis of 2,555 WC policies (product 5030) from Premia UAT. Commission section based on system structure and standard practices due to commission data being in separate tables.