Aon has told Lloyd's underwriters it will cease collecting fees for third party service providers such as loss adjusters in a bid to manage a potential conflict of interest.

The broker said it would only collect fees where it was of "direct benefit" to the insured.

An Aon spokesman said: "We have decided we will no longer collect fees from underwriters for third party services, for instance, where the fees are for underwriters' representatives, such as loss adjusters and coverage lawyers, whose work is not of direct benefit to our clients."

The change came into effect on 31 December.

One loss adjuster expressed frustration at Aon's move.

"We represent the policy rather than the underwriter or the broker.

"We believe the client is getting the benefit of our services, regardless of who is paying our fee.

"We are sympathetic to Aon's cause because it has had to make up its mind on who it represents.

The loss adjuster added: "However, the market was given no tangible time to adjust to this."

Aon is understood to have recommended that underwriters employ a separate body to collect expert fees.

The source added: "If underwriters outsource, someone still has to pick up the fee, and that could ultimately mean expert fees will rise."