What Canadian insurers are paying their brokers

A flap over undisclosed broker commissions in New Zealand offers a stark contrast to the disclosure of broker commissions in Canada. Here’s a sampling of standard commissions that select Canadian insurers pay their brokers….

Recent press reports in New Zealand about the “mystery” commission levels collected by the country’s insurance brokers highlights the extent to which broker commissions are publicly disclosed and regulated in Canada.

In a recent article entitled ‘Insurance brokers under scrutiny,’ New Zealand’s The Press discusses how insurance brokers shop around for deals for their customers, “but the size of their commissions is a mystery, even to the Insurance Council.”

The article notes that most broker commission levels range from between 15% to 25%. Some are as low as 10%, while some can go more than 30%. The Press said it learned of one Wellington businessman who, concerned about rising premiums, asked his broker for a cost breakdown -- and and found he was paying 50%.

“The only people that really know are the brokers themselves,” The Press quotes Insurance Council of New Zealand chief executive Chris Ryan as saying of broker commissions. “That is the difficulty we have.”

The lack of disclosure in New Zealand stands as a stark contrast to the situation in Canada, where basic commission levels are fairly uniform across the industry and website disclosure is common.

Here is a sampling of standard or basic broker commission levels in Canada, as disclosed on insurance company websites.

Intact Insurance
Private Passenger Automobile:  10-12.5%
Optional Automobile Coverage (British Columbia):  18%
Personal Household & Property:  15-20%
Commercial Property:  20-22.5%
Commercial Automobile:  7.5 - 15%

Aviva Canada
Private Passenger Automobile:  10- 12.5% (New Brunswick ranges from 9-15%)
Personal Household & Property:  15-25.0% (New Brunswick ranges from 15-25%)
Commercial Property:   20%
Commercial Casualty:  20%
Commercial automobile:  7.5-12.5% (Saskatchewan ranges from 7.5-15%)

RSA Canada
Personal Automobile:  10-14%
Personal Property (homeowners, tenants and condominium):  20%
Commercial Automobile: 7.5-12.5%
Commercial Property:  20%
Commercial Liability (including Umbrella and Excess Liability):  15%

The Dominion
Automobile (except high risk and special purpose vehicles): 12.5%
High Risk and Special Purpose Vehicles: 7.5-10%
Property (includes home-owners and tenant policies, personal and commercial policies):  12.5-20%
Group insurance and programs: 10-25%
Liability (commercial umbrella): 15%
Liability (other):  20%

Automobile: 7.5-12.5%
Casualty:  10-20%
Property: 10-20%

Sovereign General
Commercial Property:  20-25%
Commercial Casualty:  17.5-25%
Commercial Auto:  12.5%
Personal Lines Habitational:  20-25%
Personal Lines Automobile:  12.5%

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