Revenue Recognition (Notes)

12 Months Ended

Dec. 31, 2018

Revenue from External Customer [Line Items]

Disaggregation of Revenue [Table Text Block]

NOTE 2· Revenues

The following table presents the revenues disaggregated by revenue source:



	Twelve months ended December 31, 2018
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Base commissions⁽¹⁾	$	811,820	$	324,168	$	226,117	$	—	$	(68	)	$	1,362,037
Fees⁽²⁾	148,121		144,195		50,571		189,041		(1,090		)	530,838
Incentive commissions⁽³⁾	48,698		1,543		864		—		41			51,146
Profit-sharing contingent commissions⁽⁴⁾	24,517		23,896		7,462		—		—			55,875
Guaranteed supplemental commissions⁽⁵⁾	8,535		76		1,350		—		—			9,961
Investment income⁽⁶⁾	2		506		165		205		1,868			2,746
Other income, net⁽⁷⁾	1,070		79		485		—		9			1,643
Total Revenues	$	1,042,763	$	494,463	$	287,014	$	189,246	$	760		$	2,014,246

(1)

Base commissions generally represent a percentage of the premium paid by an insured and are affected by fluctuations in both premium rate levels charged by insurance companies and the insureds’ underlying “insurable exposure units,” which are units that insurance companies use to measure or express insurance exposed to risk (such as property values, or sales and payroll levels) to determine what premium to charge the insured. Insurance companies establish these premium rates based upon many factors, including loss experience, risk profile and reinsurance rates paid by such insurance companies, none of which we control.


(2)	Fee revenues relate to fees for services other than securing coverage for our customers and fees negotiated in lieu of commissions.


(3)	Incentive commissions include additional commissions over base commissions received from insurance carriers based on predetermined production levels mutually agreed upon by both parties.


(4)	Profit-sharing contingent commissions are based primarily on underwriting results, but may also reflect considerations for volume, growth and/or retention.


(5)	Guaranteed supplemental commissions represent guaranteed fixed-base agreements in lieu of profit-sharing contingent commissions.


(6)	Investment income consists primarily of interest on cash and investments.


(7)	Other income consists primarily of legal settlements and other miscellaneous income.

Contract Assets and Liabilities

The balances of contract assets and contract liabilities arising from contracts with customers as of December 31, 2018 and 2017 were as follows:



(in thousands)	December 31, 2018		December 31, 2017⁽¹⁾
Contract assets	$	265,994	$	210,323
Contract liabilities	$	53,496	$	51,236


(1)	The balances as of December 31, 2017 reported in this footnote have been revised to reflect the impact of adopting the New Revenue Standard.

Unbilled receivables (contract assets) arise when the Company recognizes revenue for amounts which have not yet been billed in our systems. Deferred revenue (contract liabilities) relates to payments received in advance of performance under the contract before the transfer of a good or service to the customer.

As of December 31, 2018, deferred revenue consisted of $37.0 million as current portion to be recognized within one year and $16.5 million in long-term to be recognized beyond one year. As of December 31, 2017, deferred revenue consisted of $44.5 million as current portion to be recognized within one year and $6.7 million in long-term deferred revenue to be recognized beyond one year.

Contract assets and contract liabilities arising from acquisitions in 2018 were approximately $34.3 million and $3.3 million, respectively.

During the twelve months ended December 31, 2018, the amount of revenue recognized related to performance obligations satisfied in a previous period, inclusive of changes due to estimates, was approximately $8.9 million.