Do Insurance Brokers & Insurers always act in the best interest of their Clients?

Aviva UK’s decision to walk away from an insurance group who were demanding excessively high commission suggests Evan Greenberg was prophetic in his statements a year ago. Recently Allen & Thomas & Marshall Woodbridge owned by GRP moved their clients business from Aviva to another insurer for higher commissions. A year ago the head of the world’s largest P&C insurer spoke out against “abusive behaviour” in insurance broking. Evan Greenberg, Chairman/CEO of Chubb, said some brokers were demanding “excessive” commission, practices that were “simply unsustainable”. “There will be customer & regulator backlash, or worse,” he wrote.

Some insurers & insurance brokerages do negotiate higher than standard commissions rates to reward the movement of business. Both Aviva & Evan Greenberg have expressed that these practices as worrisome. Unfortunately this discussion sounds very familiar to the events that lead to the legal allegations & investigations of some of the world’s largest insurance organizations in 2004.

As a profession the independent insurance broker must act to create regulations to prohibit the practice of insurers paying higher than standard commissions to reward the movement of a client’s insurance coverage(s).

The independent insurance broker needs to demonstrate that they are above such questionable business practices OR risk legislation & regulation that overreacts & overregulates. Generally it is only a few bad actors that participate in this behaviour. Rarely does this reflect the practices of all insurance professionals. To better protect insurance customers from these bad actors & the negative effect these bad actors can have on the broader insurance industry regulations, fines and penalties are required. 

The rewards provided by Insurers to Insurance Brokerages to move a clients insurance policy(ies) are not in the best interest of the consumer. Therefore insurance professionals in all geographies should act collectively & decisively to eliminate such practices & better protect the consumer - prior to government law makers & legislators taking matters into their own hands. Self regulate or the government will regulate!

https://www.google.ca/amp/s/amp.ft.com/content/c8a8a300-1a06-11e7-a266-12672483791a

https://www.insurancetimes.co.uk/aviva-end-all-business-with-grp-owned-broker-over-commission-demands-/1426905.article?adredir=1