All expenses directly related to acquiring insurance or reinsurance accounts; i.e., commissions paid to agents, brokerage fees paid to brokers, premium taxes and expenses associated with marketing, underwriting, contract issuance and premium collection.****Insurer’s/Reinsurer’s cost of securing business including commission to Agents and brokers and other marketing expenses. It also can be accounting charge for placing a new Policy as on Insurer’s books.
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The expense undertaken to acquire new business. The concept applies to both agents and companies. The largest portion of an insurer’s acquisition cost is agent’s or sales representative’s commission or bonus.
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Expenses incurred by an insurer in obtaining new business and issuing policies. Commission to intermediaries accounts for the largest portion of acquisition costs.