Insurance is one of the largest commission markets
Insurance is a massive industry in Australia, and a significant portion of it runs on commission based sales. From general insurance (home, car, business) to life insurance and income protection, there are many opportunities for independent agents.
The commission structures are often very attractive, with upfront commissions on new policies plus trailing commissions on renewals.
Licensing and compliance
Before you sell insurance in Australia, understand the regulatory requirements:
General insurance
To sell general insurance (home, car, business, landlord), you typically need to be authorised under an Australian Financial Services (AFS) licence. Most agents do this by becoming an authorised representative of an existing AFS licensee.
Life insurance
Life insurance products require you to be an authorised representative of an AFS licensee. If you want to provide personal advice on life insurance, you also need to meet education and training standards set by ASIC.
Training requirements
Both general and life insurance agents need to complete ongoing professional development requirements. The specific requirements depend on your licensee and the products you sell.
Commission structures in insurance
Upfront commission
You earn a percentage of the first year premium. This can range from 15% to 40% depending on the product and the insurer.
Trailing commission
You earn a smaller ongoing commission (typically 5% to 15%) on each policy renewal. This is where long term wealth is built. A client who renews their policy for 10 years generates trailing commissions for 10 years.
Hybrid models
Some insurers offer a lower upfront commission in exchange for higher trailing commissions, or vice versa. Choose the model that aligns with your financial goals and selling style.
Building your client book
Insurance is a relationship business. The most successful agents build their client books through:
- Referrals from existing clients
- Networking within a specific industry or community
- Partnering with complementary professionals (accountants, mortgage brokers, financial planners)
- Community involvement that builds your reputation and visibility
Retention is everything
In insurance, retention directly impacts your income. Every policy renewal generates trailing commission without any additional sales effort. Focus on:
- Conducting annual reviews with your clients
- Proactively reaching out before renewal dates
- Helping clients with claims promptly and professionally
- Building genuine relationships, not just transactions
The long term view
Insurance is not a get rich quick business. It is a career that rewards patience and consistency. The agents who build substantial client books over 5 to 10 years often earn six figure incomes with a significant portion coming from recurring commissions.