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Insurance Business | 13 Oct 2014, 01:03 p.m. Agree 0
The head of a top broking firm says the issue of disclosure shouldn’t just be about broker fees and should be sorted out internally to protect the industry’s reputation.
  • Old School Broker | 13 Oct 2014, 02:17 p.m. Agree 0
    Why is it that we are being pushed to tell our customers what we earn? Most businesses do not disclose their mark up or profit when they sell us a product - did the local car dealer tell you how much he made when you last bought a car?
  • F. Fanshawe | 13 Oct 2014, 06:09 p.m. Agree 0
    What do brokers have to be worried about if the simple truth was to be passed on to the Insured?
    One key attribute of any efficient market is access to clear and accurate information – including… pricing information.
    That is not to say that fees are necessarily unjustified, often brokers deserve all they are paid for - but Net pricing and/or greater fee transparency will certainly put downward pressure on any unreasonable or unjustifiable fees being charged.
  • Also insured | 14 Oct 2014, 08:34 a.m. Agree 0
    Hmmm QBE to quote net but maybe not across the board...
  • F. Fanshawe | 14 Oct 2014, 09:47 a.m. Agree 0
    I fully support QBE's view on this.

    Net pricing, or transparency is key.

    Broker's should have nothing to fear IF their fee structure is reasonable and justifiable.

    There are examples of brokers charging Fees that are clearly over the top - although these are isolated cases.

    In any efficient market, access to full and accurate information is key. That includes the cost structure being passed on to Insureds for the broker's service.

    Price fluctuations in our market is often blamed entirely on Insurers (or even ReInsurers) often where much of the final number put infront of the Insured includes broker fees.
  • brokerworld | 14 Oct 2014, 12:11 p.m. Agree 0
    yup- if insurer's are happy to share markup on re-insurance, brokers should be happy to disclose their fee compo which derives out from the extent of work involved on case to case basis. That's - level playing field IBANZ should work on.
  • Action required...or else??!! | 15 Oct 2014, 02:31 p.m. Agree 0
    Whilst it would probably be seen as Nirvana in some quarters full disclosure of income by Brokers isn't the answer but the current situation that exists where Brokerage can be earned and a "Fee" that isn't required to be disclosed added on top isn't acceptable, no matter how small the Fee is.
    Brokerage and Fees are completely different ways of a Broker earning income and should be kept sepetrate as such. If Brokerage isn't enough to cover a Brokers costs that is a conversation that needs to be had with the client not solved by simply adding a Fee into the invoice without the customer being aware of it. The Generic comment that "this invoice might include a Fee..." isn't the way it should be addressed if we want to be considered professional in the way we conduct our business rather than being seen as little better than Used Cars salesmen.
    IBANZ needs to show leadership on this subject and come up with a practical solution otherwise someone like the Commerce Commission is going to come in a get involved. They'd LOVE to get there teeth into this sort of thing which would not be a good thing whichever side of the fence you sit - Broker or Insurer. Meaningful self regulation is required if we are to avoid regulatory involvement in it's inevitabel more extreme form.
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