Are ARs the future of broking?

Are ARs the future of broking?

Are ARs the future of broking? Authorised representative networks have hit headlines recently but are they the future of the broking industry?

With the recent deal which saw IAG acquire Westcourt General to integrate with NAS, the AR model is again making waves but Dale Hansen, chief executive officer of Austbrokers Coast to Coast, said that it is wrong to call ARs the future of the industry.

“People are looking at it as an emerging phenomenon but it has already emerged and it is already here,” Hansen told Insurance Business.

“It is here whether we like it or not.

“It is what form it needs to be in that I think is the question.”

Michael Olofinsky, managing director of Brookvale Insurance Brokers, agreed and noted that questions remain over client ownership.

“For the go getter ,it probably would be an opportunity to build their own business,” Olofinsky noted. “The question is who owns the client.”

David Coe, managing director of Northwest Insurance Brokers and a long-time proponent of the AR model, said that he expects the industry to continue its growth over the coming years and does not think that the deal between IAG and Westcourt will be the last.

“I’ve been doing this for 25 years and I believe no doubt that the AR model will continue to grow and get bigger,” Coe told Insurance Business.

“There will be amalgamation… but it will just be the way.”

Hansen stressed that while it would be unfair to tar all ARs with the same brush after some recent difficulties, changes may need to be made from a compliance and corporate governance perspective.

“I don’t think there should be any difference. I think the same compliance should be in place whether you are an AR or a broker, I think it should be the same,” Hansen said.

“Otherwise where are we going and what is the future holding here?”

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  • 26/09/2016 11:22:16 AM
    Just remember essentially the AR's are "the brokers" and generally very experienced its just that they prefer not to own an accounts department to receive premiums and reconcile insurer's statements.
    The question should be what is the compliance status of the larger brokers that offer the AR modules?!

    Craig Saunders - SPHERE GROUP
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  • glenda 26/09/2016 11:44:47 AM
    agree whole heartedly crag!!! Ar's can only work within the framework set by the licence holder - it all starts at the top! i would like to see more scrutiny of the licence holder rather than the AR as far as compliances go. it should continue to remain both the licence holder and the AR's individual responsibility to ensure that what they are doing is good work and compliant with the rules. if the licence holders have good strong compliance systems in place and continually monitor their internal breach registers, complaints registers and audit their AR's client files then the AR models will work as well as or better than the employee system, in my opinion
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  • A satisfied AR 26/09/2016 2:49:28 PM
    Agree Glenda ,MGA Insurance Brokers has been running this successful model for many years ,and as an AR the comfort is in all those support facilities they provide from Accounting.IT and compliance etc Plus the strength of National Broker .
    AR's are here to stay with a good model platform to develop your own business .
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