Brokers should be proud of their role in the market.
There are several aspects that trouble me about the current possibility of changing the very core of how we work as brokers.
I am always concerned when we consider changing a situation that has existed for hundreds of years with very few, if any, complaints.
We should also consider the positive aspects which are unique to the way in which international insurance brokers currently work and question whether we should tamper with these.
We should be proud of our record, by comparison with other professions, for our ability to prevent conflict. It is entirely a broker’s role to understand exactly what it is his client wants and to then provide him with precisely that product.
How many complaints are made against us? I would be willing to bet that there are very few. More importantly, we should remember that to a large extent and, unless there are claims or changes, a broker’s role is concluded at the moment of winning the client. Our major role in its very essence is to acquire and place business, and to do so by negotiating the best price we can.
We are marketers, salesmen and negotiators first and foremost and even act as the marketing and sales arm for a number of insurers who, in many cases, do not even possess such departments.
How then, can we begin to negotiate commission with a client only on the basis of the work we do once we have performed this work? This is why we have always been paid by insurers.
We do all this, putting in sometimes hundreds of hours of work and committing vast amounts to travel, entertaining and hotel costs, with absolutely no guarantee of payment.
So, instead of challenging this wholly unique system, surely we should be praising ourselves for working within a system, which in these days where nothing seems to move without payment, has a fundamental integrity?
We operate in a system forged by historical rigour which has a deep integrity. It is unfair to try to change only one aspect of the way we work.
Perhaps we should consider changing everything about how we work and act more akin to insurers, who may charge whatever they deem fit without having to disclose any of their costs – broker costs being just one – alongside the cost of reinsurance.
In fact, I would go further and predict that in future many major brokers will become proxy insurers. They will treat the markets in which they place business as reinsurance markets so as to act in a completely legitimate way as companies seeking to maximise profits, just as they would have done had the rules of disclosure been made an historical fact.