Life insurance agents often insist that compensation does not influence where they place business, framing product fit, customer needs, and service quality as the dominant drivers. We recently surveyed hundreds of agents and revealed a more nuanced reality. While those factors remain important, compensation structures—including base commissions, bonuses, and incentives—play a meaningful role in shaping placement decisions for a significant proportion of agents. Contests and recognition programs also continue to have an outsized impact, reinforcing the idea that motivation is not purely financial but also tied to competition, achievement, and status within the field. For insurers, these findings carry clear implications. A competitive, well-structured compensation program is not just a hygiene factor—it is a differentiator in attracting and retaining producer attention.

Designing and managing such programs, however, is no simple task. Incentives must balance fairness, regulatory compliance, and strategic growth goals while remaining responsive to shifting agent expectations. Increasingly, this requires specialized technology capable of modeling, administering, and tracking complex compensation plans at scale. Insurers that prioritize compensation strategy and execution will be better positioned to build stronger distribution relationships and drive sustained growth.