The growth contingent is based upon a relationship between:

A growth contingent, a form of contingent commission in the insurance industry, is an incentive payment made to agents or brokers. Its calculation is typically based on a dual-contingency structure that evaluates both the increase in the volume of business written (premium volume) and the quality or profitability of that business (often measured by the loss ratio). This approach aligns the agent's interests with the insurer's by rewarding not just growth in sales, but profitable growth. Therefore, the contingent is based upon the relationship between the profit generated from the agent's book of business and the total premium volume.

A. Net investment income is a result of the insurer's overall investment strategy, not a metric directly tied to an individual agent's underwriting performance for contingent commission purposes.

B. Commissions are an expense paid to the agent and a component of the profit calculation, not a basis for the contingent relationship itself.

C. Loss and adjustment volume is a key component used to determine profitability (i.e., the loss ratio), but it is not the complete basis; it must be related to premiums.

1. Rejda, G. E., & McNamara, M. J. (2017). Principles of Risk Management and Insurance (13th ed.). Pearson. In Chapter 8, "Insurance Company Operations," the text explains agent compensation, stating, "A contingent commission may be paid to agents who meet certain production, loss ratio, and profitability goals." This directly links premium volume (production) and profit (loss ratio).

2. Grace, M. F., & Phillips, R. D. (2007). The Economics and Politics of Insurance Regulation. In K. E. Harrington (Ed.), Risk and Insurance (Vol. 1, pp. 1-54). The Wharton School, University of Pennsylvania. The discussion on agency relationships notes that incentive contracts like contingent commissions are designed to align agent behavior with insurer profitability by tying compensation to both volume and underwriting results. (Section on "Agency Costs and Regulation").

3. Regan, L., & Hsieh, P. H. (2001). An Economic Analysis of Contingent Commissions in the Property-Casualty Insurance Industry. Journal of Risk and Insurance, 68(4), 643–661. https://doi.org/10.2307/2678113. This paper analyzes the structure of contingent commissions, modeling them as a function of both the volume of premiums written and the loss experience (profitability) of the business produced by the agent.