Variable deals could help brokers compete in SME

Groupama is offering brokers variable commission deals across the whole of its commercial product range.

Commercial director Malcolm Smith said the deals would smooth business or help the brokers to compete in the SME market.

Each of Groupama’s commercial products will carry a default commission level but, where required, brokers will be able to select an alternative amount of commission from a specified range.

It means brokers can select a higher commission, ending the need to bill customers on top with service charges, although the premium will be raised.

On some products brokers can go in the opposite direction by taking a lower commission, helping them to compete in the market as the premium will be reduced accordingly.

Alternatively, brokers can select no commission and bill on a fee basis or select the default commission.

Smith said feedback from broker roadshows had been in favour of variable commission deals.

Smith said: “Ultimately, we think that individual brokers are in the best position to assess the cost of handling a particular policy and, where necessary, to justify their remuneration to the client.

“From an insurer’s perspective, it is the net underwriting premium and the business quality itself that is all-important to our bottom line result.

“Offering a variable commission option gives brokers greater control over the way they conduct their business and can help them to operate profitably in accordance with FSA requirements.”