Variable costs directly linked to selling a policy: intermediary commissions, solicitation expenses and variable underwriting costs.
Acquisition costs encompass variable costs to obtain or renew a policy: broker/agent commissions, variable sales remuneration, direct marketing expenses. They are the dominant component of the expense ratio, representing 15–30% of premiums depending on channel. Under IFRS 17, costs directly attributable to a contract are deferred and amortized over the contract term (DAC). The distinction between acquisition costs (variable, production-linked) and administrative expenses (fixed, overhead) is structurally important for business model analysis.
20% broker commission on 1,000,000 EUR GWP = 200,000 EUR acquisition costs, contributing 20 points to a total 28% expense ratio.
acquisition costs, commissions courtage, frais de souscription, DAC