mediumConceptDesignMidSenior
Who are the parties in an insurance distribution chain, and how would you calculate and settle their commission?
6 min readUpdated 2026-08-15
Answer
Short answer
Brokers act for the customer, agents and coverholders act for the insurer, aggregators generate quote volume and embedded partners sell cover inside another purchase. Commission accrues from premium transactions, reverses when they reverse, and settles either gross or net of the intermediary's deduction.
Keep distribution explicit in the answer because that is the concept the interviewer is actually trying to test. A good distribution explanation names the trade-off, the failure mode, and the evidence you would use before choosing. Use distribution once more at the decision point so the answer reads as judgement rather than a detached example.
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Likely follow-ups
- How would you handle an override or profit commission that can only be calculated after the year's loss ratio is known?
- What changes in your quote pipeline when the volume comes from an aggregator rather than your own site?
- Who owns the customer relationship in embedded insurance, and what does that imply about servicing and renewals?
- How do you reconcile a broker statement that disagrees with your ledger by a small amount every month?
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