Brokers 'voluntarily reducing commissions' in hard market

Brokers ‘voluntarily reducing commissions’ in hard market

16 February 2023

Many brokers are choosing to wind back commission levels as premiums soar and clients struggle with the cost-of-living crisis, the National Insurance Brokers Association (NIBA) says.

The Quality of Advice Review final report recommends that the general insurance exemption to the ban on conflicted remuneration stays in place, meaning that brokers can continue to collect commissions on the sale of policies.

In theory, as premiums continue to soar by 10% or more in many lines of insurance, brokers would see an increase in their income.

But NIBA CEO Phil Kewin says intermediaries are increasingly looking for ways to assist clients, so that they can continue to afford the cover that they need.

“We are hearing that many brokers are reducing the commission, or charging a flat fee, if the work required is the same,” Mr Kewin told insuranceNEWS.com.au

“It is part and parcel of what brokers do to help their clients.”