If a rising tide lifts all boats, then commissions are being lifted by an increase in premiums and considerations.

In 2004, the top 50 companies as ranked by total commissions paid saw a 13% growth in commissions to $23 billion from $20.3 billion in 2003, according to data from the National Association of Insurance Commissioners Annual Statement Database via National Underwriter Insurance Data Services/Highline Data.

Individual ordinary life insurance commissions increased 10% to $6.9 billion from $6.2 billion, and individual ordinary annuities commissions rose 23% to $8.3 billion from $6.7 billion in 2003.

The increase should be examined in the context of an increase in premiums, the mix of products being sold and whether commissions are first-year or renewal premiums, according to Jim Renz, director-accounting policy, with the American Council of Life Insurers, Washington.

“What it is least likely attributable to is an increase in commission rates,” he says.

In a separate look at premiums, the ACLI tallied the top 50 companies just by premium and found that life premiums increased 21% in 2004 over 2003 and annuity premiums were up 18% for that same time frame.

Indeed, for those top 50 companies in the NU data run, total premium growth increased 16% to $324.2 billion from $279.3 billion.

First-year premiums for these companies grew 9% and renewal premiums, 8% in 2004 over 2003, the NU data showed.

Several companies with large changes in their commission totals detailed reasons for those changes.

ING USA Annuity and Life Insurance Company, Des Moines, Iowa, merged a number of legal company entities into one company, says spokeswoman Christina Divigard, and as a result commissions rose.

In 2004, total commissions increased 93%; life commissions, 3,458%; and, annuity commissions, 206%. But, Divigard notes, if you examine commission increases in relation to premium, there is a constant 5.8% rate in 2004 and 2003.

Fidelity & Guaranty Life Insurance Co., Baltimore, had commission increases for a variety of reasons, says Siobhan McNulty, a spokeswoman for Fidelity’s parent Old Mutual Financial Network, Baltimore.

The company’s total commissions paid jumped 74%; life commissions rose 55%; and, annuity commissions, 92%.

Life commissions were commensurate with a 56% increase in premiums, says McNulty. On the annuity side, she continues, there was a 55% increase in premium, but there was also a move to a more diversified product mix, which includes traditional fixed annuities that have a lower commission structure and new equity linked products that pay higher commissions.

Both Allianz Life Insurance Company of North America and Principal Life Insurance Company had commission increases commensurate with premium growth.

Premiums at Allianz, Minneapolis, were $12.8 billion in 2004 compared with $8.9 billion in 2003, says company spokesperson Jody Hilgers. Commissions over premiums were 9.5% in 2004 and 9% in 2003, Hilgers adds. Increases in commissions, according to the NU data, were a 52% rise in total commissions; 39% in life commissions; and, 55% in annuity commissions in 2004 over 2003.

Tina Marchetti, a spokeswoman for Principal Life, Des Moines, says the increase in commissions reflects higher sales: 39% for individual annuities and 110% for individual life in 2004 over 2003. Principal Life had a 26% increase in total commissions–with a 74% increase in life and a 62% increase in annuity commissions.

And, at Sun Life Assurance Company of Canada (US), Wellesley Hills, Mass., an increase in sales and a change in the mix of business resulted in an increase in commissions, says spokesman Jeff Landis.

Sun Life’s U.S. operation had a 48% increase in total commissions and a rise of 72% in annuity commissions.