Networks agree to cuts
Broker networks have called a temporary truce with insurers over commission levels as the economic crisis deepens.
Over the past year networks and consolidators have been accused of driving up commission rates, some demanding more than 40%. But some brokers have accepted that they cannot demand more as insurers struggle.
“There are one or two areas where insurers have looked to push down commissions and we’ve gone along with that,” said Grant Ellis, chief executive of the Broker Network.
Networks are more concerned with maintaining commission levels than raising them, said Dave Hopwood, director of Layton Blackham. “If they’re sensible, that’s what networks will do because insurers aren’t looking to pay any more commission,” he said.
“A lot of networks will be expected to justify their levels of commission, and I think insurers will start with the bigger guys.”