Car insurance brokers usually make more than car insurance agents because a broker generally has a larger pool of clients they can cater to than an insurance agent can.

How do auto insurance companies make money. They have to make a profit to stay in business. In most cases of self-funded insurance the employer contracts with a commercial insurance company to administer the benefitsso the enrollees might have plan ID cards that say Humana or Anthem for examplebut its the employers money thats being used to pay the claims as opposed to the insurance companys money. The first 1000 people to sign up to Skillshare will get their first 2 months for free.

This kind of profit is known as underwriting profit. Insurance companies keep track of the claim ratio or the loss ratio for every year. Most insurance companies end up making money on their investment results.

Insurers associate together large swaths of their policyholders into groups via the risk-assessment criteria discussed earlier -- type of car driving record and so on. Insurance companies get a lot of money from premiums and instead of leaving the money lying around fallow they invest it in different assets that would yield profits for them eventually. Some companies realize what is called an underwriting profit which in simple terms is profit after claims paid and administrative expenses.

In the meantime the revenue from the stream of monthly customer payments allows insurers to pay expenses earn income and reinvest. They can earn underwriting income investment income or both. There are two basic ways this can be accomplished.

Ultimately insurance companies are like any other business in the world. But many have an underwriting loss and make it up through the investment returns on money they hold in premium and surplus. In addition to making a commission when a policy is initially sold captive agents and independent agents may make money when the policy is renewed.

However the national average for insurance agents is between 45000 to 60000 a year. Insurance companies make money by betting on risk -. Some insurers try to encourage agents and brokers to write new policies by paying a higher base commission for new policies than for renewals.