Axa's decision to cut broker commissions for certain product classes by as much as 50% was not opportunistic, Colin Calder, AXA's head of broker development told Insurance Times.

The British Insurance Brokers' Association (Biba) had called the move "opportunistic and ill-timed" after the insurer said it would be reducing broker commissions on certain liability orientated products as part of a drive to reduce distribution costs.

AXA, however, said rising premiums would offset any falls in broker incomes.

Biba's chairman Mike Williams said brokers might not feel the impact of the commission cuts in the short-term, because of rising premiums, but they would in the long-term because of the cyclical nature of the industry.

Williams said: "Once commission rates are reduced, they stay reduced and when premium rates start to fall again, then it has an immediate impact on the broker."

However, Calder said the move was scheduled - part of its annual review of commissions and not something that had just happened.

He added that AXA was expecting substantial premium increases for liability, and in particular employers' liability contracts, over several years and that that would sustain broker incomes in most cases.

"Liability classes are not the bulk of insurance premiums for the majority of brokers. We do recognise that it will have an impact on the bottom line of some brokers. But we are talking to those brokers with those specific difficulties," he said.

He added that AXA was also working on improving its own efficiency and service levels to reduce costs.

Williams called for the broker community to fight reduced commissions. He said the move could set a precedent for other insurers and a strong response was needed to prevent similar actions.