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Insurance Business | 18 May 2016, 08:48 AM Agree 0
A recent survey ranked insurance brokers as one of the least trustworthy professions in Australia and we want your thoughts on how brokers can improve their image
  • Poppy | 18 May 2016, 12:09 PM Agree 0
    Brokers should know what their value proposition is - and if it is just to bring their client a cheap price then they are undervaluing their service so why would anyone else value them? They need to invest in themselves by improving their technical knowledge in insurance but also their broader knowledge. They need to know their clients business and industry - you need to talk their talk. Also take the time to have communication with your client during the year with information relevant to them. Show your client that you are not there for a cheap price but become a valued advisor to them.
  • Rod | 18 May 2016, 05:14 PM Agree 0
    Stop raiding trust accounts would be a good start! Clients must lose all respect for our industry when they are advised the premiums they paid did not reach the insurer and can they prove they have paid! ASIC, the Insurers (who are left holding the can) are going to start questioning our ethics and controls because of the actions of a few that give us all a bad name.
  • Greg Walsh | 18 May 2016, 05:43 PM Agree 0
    Accountants had an image problem some years ago. Accountants embraced the CPA ( Certified Practising Accountant ) programme & the accountancy industry image has increased substantially.
    The General Insurance Industry needs to consider a similar course of action. We have the resources in ANZIIF, Steadfast, Austbrokers, NIBA etc
  • Chris csldicott | 18 May 2016, 06:20 PM Agree 0
    Reasonable assessment. I have been a broker for over 20 years. Some of my competitors are very price orientated. I can wait for a hard market so the real brokers will stand up. Sell on price and you are a car many AR's
  • Mark | 23 May 2016, 09:45 AM Agree 0
    Chris csldicott - what do you mean by 'to many AR's'? As the broking profession shifts so does the entrance model....
  • #clientadvocate | 23 May 2016, 10:15 AM Agree 0
    Until commissions, distribution brokerage, portfolio overriding commissions and any other incentives/gifts are removed from the market; trust and broker will never sit right in the same sentence. Brokers have to decide who the real client is and act accordingly.
  • Ex Broker | 24 May 2016, 11:05 AM Agree 0
    I think that the time of payment by commissions needs to end. Charge a fee consummate to the work put in and the value given to the client. So often I saw two similar style policies with similar work put in but one attracted a higher premium than another due to the occupation or location so more commission was paid.

    The remuneration of brokers should not be linked to premium. If the profession wants to be respected payments need to be fully disclosed and not hidden in a statement in an FSG that state payments up to x% commission.
  • Broker | 24 May 2016, 06:35 PM Agree 0
    So if the commissions were stopped and fee for service only, brokers would then be charging clients for all time spent on an account. So simple rego number alterations, change of vehicles that result in a nil ep would all need to be charged a fee by the broker so we are renumerated. Managing claims for clients, we would have to charge for that also. For the end consumer I feel the fee based policies will costs the same if not more than commission.
    As for brokers that chooses to use a product or insurer that gives them the higher commission, this is rare but to combat that why not look at equal commissions across all insurer's. So for ISR it may be a standardised 15%, motor 10% and so on.
    If commissions were stopped altogether then cluster groups such as AIMS, steadfast etc would not be renumerated. This would make the consumer worse off as there would not be any badged wordings providing the Insured superior covers etc.
    I do not believe that commissions are the issue. Never have I had a client complain about commission, they know we must be renumerated.
  • Ex Broker | 25 May 2016, 11:24 AM Agree 0
    There is no commission paid on nil EP alterations or when a claim is lodged. What I am saying is set a fair fee for the work that can be expected on an account. Sometimes this may be higher than the commission you would otherwise receive other times lower.

    The main point I am trying to make is that the advice should be given with 100% of the client's best interests in mind. There should be no financial benefit to the broker in selling a higher price policy.

    If a broker is a good one he/she should be able to comfortably justify a fully disclosed fee and link it to the value they are adding. Maybe as an interim step disclosure on the invoice of commission paid could achieve a similar outcome as brokers would need to justify the remuneration to the client.
  • The West Australian Perspective | 25 May 2016, 11:57 AM Agree 0
    Whilst I understand the different spins being put on this matter, the fact is that an insurance broker works for their client and it is not in their best interests in any way shape or form to perform their role to best practice standards for their client.
    As an "Ex Broker", surely Ex Broker understands this point and would see how nonsensical his comment is about brokers needing to show more commitment to their clients.
    Bottom line is no client, no income whether that be commission or fees.
    The basis of our economy determines methods of remuneration across various industries and we are already required to disclose our basis of remuneration to clients in any event.
    In a free market economy the client always has the option to determine how they wish to pay for their services and if they choose a "fee for service" option then so be it.
    I have no problem charging clients annual fees and in fact this is how I receive the majority of my remuneration from my clients and I am an AR as if that makes any difference.
  • Brokers | 26 May 2016, 12:27 AM Agree 0
    For every one good broker there are 5 bad brokers. I don't blame the public for hating brokers that only want more from their clients wallet. Bad brokers.
  • Perception | 26 May 2016, 10:52 AM Agree 0
    Agree in a way with 'brokers' there are very good brokers in the industry but there are also some very questionable ones - all too often we are told that Brokers are perceived poorly and nearly each time it seems instead of addressing the issue many of brokers seem to shift the blame and not take this valuable feedback on board.

    How many times on this site have we seen the blame deflected onto 'Corrupt AR's' or 'Dodgy Strata Managers' or just blaming the clients for not understanding the industry?

    The fact that the suggestion to remove commission is part of the discussion in the comments is a good indicator of the issue - commissions are not the problem, its the way some brokers hide commissions like dirty laundry that give the public such a bad view of them.

    If correctly disclosed, commissions can be sold as a benefit - the customer is receiving the services of insurance professional at a cost potentially greatly offset by payment from the insurer.

    We are responsible for the way the public perceive us, if we cannot sell ourselves how can we hope to continue to sell insurance?
  • #clientadvocate | 26 May 2016, 12:35 PM Agree 0
    Receiving commission is flawed for a variety of reasons, the two main issues;

    As commission is based on a percentage of premium, the broker has a disincentive from obtaining the best premium for their client, because the lower the premium obtained, the less remuneration is received.

    Receiving commission from the insurer is in direct contrast to the principle of the broker being an advocate for the insured entity, and providing its services directly to their client.

    You cannot be independant and receive commission.

    Imagine if your accountant received a kick back from the ATO for every extra dollar you paid in tax.
  • Underwriter | 26 May 2016, 12:49 PM Agree 0
    Whilst I certainly do not envy the position of an underwriter, sloppy to us will also equal sloppy to the client. Submissions without sufficient information, brokers who are too scared to ask pertinent questions and squeezing and moving accounts year on year simply for the cheapest price is not broking. When I started in this industry, broking was about working with underwriters for the best solutions for clients. Now it seems to be about squeezing the premiums as low as possible without any consideration for service or relationships. We have so many enthusiastic young people growing up in this industry and a lot of them only have tired brokers to learn from. What happened to the enthusiasm for doing a great job for, ultimately, the clients?
  • Underwriter | 26 May 2016, 02:01 PM Agree 0
    I meant I don't envy the position of brokers!!
  • Broker | 26 May 2016, 03:18 PM Agree 0
    We see all this talk of brokers being untrusted etc but why? Really out of the amount of Brokers and ARs in the country how many are doing the wrong thing. People's view on insurance is generally a negative one as it is a grudge purchase. Paying a annual premium for something that may never happen. I personally have not had heard of any of my clients say we are untrustworthy or talk about other brokers in my area being untrustworthy. The publics perception of Insurers is different to a broker and I think this is what people are getting confused
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