> About Us > The Future of Commercial Insurance

The Future of Commercial Insurance

In their thematic review of conflicts of interest and remuneration amongst insurance brokers in 2014, the Financial Conduct Authority found:

  1. “The structure of some intermediary businesses and sources of revenue created significant conflicts of interest particularly where firms or groups fulfilled multiple roles in the distribution chain and acted as agent for both the customer and insurer in the same transaction.”
  2. “Many customers still perceive their intermediary as an independent adviser working as their agent and seeking quotes from a number of insurers, even where this may not be consistent with the nature of the relationship described in the disclosure received.”
  3. “Commission rates for “add ons” eg legal expenses insurance or premium finance can be as low as 20%-30% but as high as 50%-100% and “Admin Fees” now account for 7% of total revenues with no standard pricing structure (and no justification if you ask us).”

Expect this to be the first step on a long path to introduce more transparency into broking and a fundamental change to the “servant of two masters” role. We have been banging on for more than 10 years about the need for independent and unbiased insurance advice and it’s good that our regulators are beginning to catch up.

We see the Future as one where:

  • the client’s interests are paramount.
  • advice is not influenced by relationships with partner insurers or compromised by the cross selling and commission targets common amongst insurance brokers.
  • a decent claims record and good risk management are reflected by lower insurance costs rather than annual premium increases.
  • choice is not limited by a broker’s preferred agency base.
  • claims representation is professional and committed.
  • the client, and not the broker, receives the financial benefits of group buying power.
  • management and purchasing can be delegated to trusted and experienced professionals.

Join us in the Future.