Commissions - Parliament - Call for market unity on disclosure

Leading figures in the UK broking market took their case against mandatory commission disclosure to the House of Commons on 22 May.

Representatives from the Institute of Insurance Brokers and the British Insurance Brokers' Association joined members of broking group Brokerbility at the All-Party Parliamentary Group on Insurance and Financial Services.

Steve Grantham, managing director at Cooke and Mason and a Brokerbility member, urged those at the meeting, including John Greenway MP, Baroness Turner and Lord Hunt, "not to be fooled" by the larger brokers.

Grantham said: "US brokers, Lloyd's syndicates and insurers want to eliminate us from the market and make more money for themselves. One director of a large brokerage recently told me that, when smaller brokers are gone, they'll be able to jack up their prices.

"The reality is that small brokers work hard, offer good service and competitive prices, which irritates the big boys. If we are forced to disclose all of our margins up front then they will be driven down. If we have to run for the exit then it will not be good for competition.

"We're not asking for protection. All we want to make clear is that we're happily competing in a marketplace against the internet and consolidators. We are holding our own."

Graham Gomm, chairman of the Institute of Insurance Brokers, said that commission disclosure threatened the future of independent insurance brokers in the UK.

Eric Galbraith, chief executive at the British Insurance Brokers' Association, added: "This debate on commission disclosure has been going on too long and has become costly, unsettling and divisive. We would like a market solution in three stages. First, we need to identify conflicts of interests and evidence that we can manage them; second, we need to be clear about profit shares and over-riders when asked about commissions; and third, we would like brokers to change their terms of business agreements to Biba Tobas, which highlights to customers that they can ask for the terms of commission."

The Association of British Insurers will outline its case to the APGIFS on 2 July.