The only winner in the regulation struggle will be Direct Insurers

Are the FSA determined to wipe out brokers so that in the future they only have to deal with insurers?

I thought commission disclosure had gone away. The cost benefit analysis showed that it could not be justified. So they have tried to find another way to bring it in.

If commission disclosure is introduced, the only winners will be direct insurers. Direct Line will be able to advertise that you can buy liability insurance cutting out the middleman and pay no commission. Brokers will be forced to show the level of commission upfront. Who is the customer going to go with, the greedy broker or the saintly cheap as chips no commission-charging insurer?

AXA , Zurich and the rest are already on the internet selling direct to businesses, thereby taking SME business from brokers. Commission disclosure will just speed up the process and hand the insurers a killer advantage.

How does less choice treat customers fairly? On the subject of treating customers fairly, insurers are now in paperwork frenzy all busily trying to make sure they have all the boxes ticked. The level of detail some insurers are now requesting is starting to get out of hand and means we need extra staff just to deal with it.

The administrative burden on brokers is now becoming prohibitive to running a profitable business. At the end of the day brokers are in business to make a profit, because unless they do they are no longer in business.

If brokers do not offer their clients an excellent service and treat them fairly, clients go elsewhere that’s the nature of a service industry.

Is the increased administrative burden really going to give the customer such a better deal?

David Quick is managing director of the CETA Network