Allianz Cornhill is cutting its commission on some non-EDI private motor products to 10% from June 1.
The decision will affect those brokers among Allianz Cornhill's 4,500 intermediaries who rely on paper-based methods to process their product data.
The new 10% rate will apply to Allianz Cornhill's Motor Cover and Premium Saver products. Previously, commission rates varied according to business volumes traded. It follows a review of the insurer's administration costs that revealed paper-based transaction costs were appreciably higher than for products processed by full cycle EDI.
The new standard 10% rate is also said to reflect the growing trend towards the use of EDI only products, such as Horizon, Allianz Cornhill's flagship motor product that offers a commission of between 7.5% and 17.5%.
It has no immediate plans to introduce a standard rate for other paper-processed personal lines products.
Gareth Jones, personal lines marketing executive predicted that within four years more than 90% of private motor policies would be transacted electronically.