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Willis Networks is in talks with its broker members over changes to its commission structure.
Willis wants brokers to pay a charge of 0.6% of their total GWP across all their commercial business.
Willis wants to keep the same amount of commission it receives from the insurers. However, it will reduce the amount it keeps of that commission from insurers, handing back more to the brokers.
Typically, Willis kept 20% of the total commissions insurers paid. Now it wants to keep only 10% and hand the rest back to brokers.
Willis Networks managing director Sara Fardon confirmed the deal to Insurance Times: “Willis Networks is enhancing its remuneration proposition to commercial network members in a way that also gives advantage to our panel of insurers.
“What that shows is that it is of benefit to both our insurers and our members.”
Insurance Times understands from market sources that the 20% commission paid to Willis was one of the highest paid to a network in the market.
As a network member brokers also get access to training as well as assistance with marketing, IT, compliance and Willis wordings.
Split broker opinion
The latest plans have split opinion among brokers.
One broker said he is still considering the offer to see what impact it will have on his business.
He added: “We are still doing the numbers but they have a struggle on their hands. They realised they were taking too much from the brokers and insurers and at the same time they have to make a profit – but they have to square that.
“The changes they have made – because they deal with a diverse number of brokers – small and large, each one has different challenges – finding one solution that suits everyone will be a difficult challenge.
“I think what they are trying to do is give a bit more back to the brokers and be fairer to the insurers. It’s very difficult to do that – you can’t have a win-win situation – someone is going to suffer somewhere.”
Another broker who wanted to remain anonymous said he is in support of the network’s plans which he sees as a move to drive more value into the network.
“I am very comfortable with the network and the concept behind it,” he added. “They want to make sure they work with the key insurance partners so driving value for their network partners and getting the strike between who gets paid what and for whom. It makes sense to me.”
Another broker, however, disagreed: “They appear to have given more commission but taken it back on the other hand. Brokers are charged for not using Willis [insurers]. How is that fair after losing Aviva?”
Pleasing members after losing Aviva
It is thought the network has faced an uphill struggle to soothe disgruntled members after Aviva pulled out as a panel member.
And last June some of its members expressed their disappointment over Willis’ “failure” to consult them about plans to sell its SME book of business to Chesham Insurance Brokers owner Tom Bartleet.
At the time Willis said it had explained the complexities of the proposed sale to members and the criteria that was used to select the proposed buyer.
Chris Hanks, non-executive chairman of Purple Partnership, said: “I think the networks are a good place for the broker to be – but they have to add value and their cost of operation must be kept to a minimum otherwise insurers won’t support it.
“Do I think insurers who are outside of the panels should contribute to the network – yes, if they can, otherwise they get a bit of a free ride.”
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