Insurance Agent Commission
Dynamic commission calculation system that determines agent payouts based on policy type, premium value, and agent performance metrics.
Solution
This commission system automatically calculates insurance agent payouts through a tiered structure that reflects both policy characteristics and agent performance. The system first determines a base commission rate according to the specific policy type (auto, home, or life) and the premium amount, recognizing the varying complexity and value of different insurance products. Higher premium policies within each category earn increased commission percentages, incentivizing agents to pursue more valuable policies.
After establishing the base commission, the system applies performance tier multipliers that reward high-achieving agents. Agents are classified into platinum, gold, silver, or standard tiers based on their sales performance metrics. Top performers receive substantial commission boosts, with platinum agents earning 50% more than the base rate and gold tier agents receiving a 25% enhancement. This performance-based structure motivates continuous improvement while ensuring fair compensation that aligns with both policy value and agent achievement.
How it works
The decision graph processes agent commissions through three main components:
Base Commission Calculation: Analyzes the policy type and premium amount to determine the appropriate base commission rate from a comprehensive table of rates. Auto policies range from 10-15%, home policies from 15-18%, and life policies from 20-25%, with higher rates for larger premiums.
Initial Commission Computation: Applies the determined rate to the premium amount to calculate the base commission value.
Performance Tier Adjustment: Evaluates the agent's performance tier (platinum, gold, silver, or standard) and applies the corresponding multiplier to the base commission. Platinum agents receive a 1.5x multiplier, gold agents 1.25x, silver agents 1.1x, while standard agents receive the base commission.
The final output provides both the tier multiplier used and the exact commission amount to be paid.
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