And so Norwich Union (NU) hits the headlines again, this week with chief executive Igal Mayer naming 30% as the ideal commission figure for consolidators. Mayer has become increasingly willing to speak out on broker commissions, perhaps conscious that as the chief executive of the UK’s largest insurer, it is incumbent on him to lead the market.
But how have his bullish statements gone down with the brokers themselves? As one points out, those brokers which are not receiving 30% or above, may now ask why not (News, page 3)? NU’s decision to enlist Bob Beckett to help smaller brokers with compliance is admirable, but would the brokers prefer cold, hard cash?
As for the consolidators, they will no doubt be determined to nip Norwich Union’s attempted rebellion in the bud before other insurers start getting ideas. They will vote with their feet and given the current level of capacity in the market, they will have a good chance of taking a book of business elsewhere for a 40% commission, if NU attempts to drive them down to 30%.
The commission negotiations are turning into a battle of wills between the country’s biggest insurer and its biggest brokers. The outcome will send waves throughout the market and ultimately decide whether it is the insurer or the broker which holds the balance of power. The question now is, who will blink first?
‘ Another network burst on to the crowded scene this week, with Broker Direct’s launch of Our Network (News, page 8). This club is aimed exclusively at members of the IIB, which raises a question about its raison d’etre. Is it to drive membership of the IIB, and what does that say about the future of that body, which many observers expect to merge with Biba some time fairly soon? Or is it, as Broker Direct states, to help independent brokers remain so, through offering support, technological advances and enhanced commissions. And if so, why limit access to IIB members?