Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


It is Time for Full Disclosure Says Waikato Insurance Broker

20 November 2012

It is Time for Full Disclosure Says Waikato Insurance Broker

Buyers across the commercial insurance market are being shocked when they find out just how much of their insurance spend is being channelled to the broker in the form of undisclosed commissions and fees.

Hamilton based commercial broking firm, Hutchison Rodway say it is high time that brokers come clean with their clients and disclose their remuneration. Recent anecdotal evidence documented that client’s generally have no idea what their broker is taking from the deal. Further, it showed that on occasion the broker remuneration was over ten times their general expectation. Concerned over how the issue was tarnishing the industry Hutchison Rodway director Rene Swindley encouraged all insurance buyers to ‘ask their broker for a complete breakdown of costs’. Good brokers should have no problem with this and the buyer can then decide if the remuneration equated to good value for the services given. “We [Hutchison Rodway – Waikato] disclose our fees on all commercial business and always have”.

The situation is further exasperated by the recent premium increases following the Christchurch earthquakes. “Premiums are increasing and some business is harder to place; however, the bulk of accounts are simply renewing at the higher rates. As brokers are being paid on a percentage of premium they are profiting very nicely” explains Swindley. The calls from insurers for intermediaries (brokers and agents) to ‘share the pain’ have largely gone unanswered.

Brokers in New Zealand have resisted mandatory disclosure stating that people would be buying insurance based on price with little regard for the advice. The reality is that in Australia, where disclosure has been a requirement for around a decade, has shown that purchasing patterns have not changed significantly. There has also been an argument that disclosure would force greater compliance costs on the industry and therefore the customer; however, there has been statutory disclosure requirements placed on the industry in the form of the Insurance Companies Ratings and Inspections Act 1994, replaced with the Insurance (Prudential Supervision) Act 2010, with no significant cost to the intermediary market. Swindley says “let’s face it, the industry is pretty competitive, if a broker is not playing by the rules, everyone hears about it, even the regulator so compliance will not be an issue”.

ends


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Insurance: EQC To Double Payout, Scrap Contents Insurance

New Zealand’s Earthquake Commission may double its payout amount, scrap contents insurance and process claims through private insurers under the government’s long-running review of funding and management of the state-run earthquake insurer. More>>

ALSO:

Gordon Campbell: On Tiwai Point (And Saying “No” In Greece)

Its hard to see how Rio Tinto’s one month delay in announcing its intentions about the Tiwai Point aluminium smelter is a good sign for (a) the jobs of the workers affected or (b) for the New Zealand taxpayer. More>>

ALSO:

Half Empty: Dairy Product Prices Extend Slide To Six-Year Low

Dairy product prices continued their slide, paced by whole milk power, in the latest GlobalDairyTrade auction, weakening to the lowest level in six years. More>>

ALSO:

Copper Broadband: Regulator Set To Keep Chorus Pricing Largely Unchanged

The Commerce Commission looks likely to settle on a price close to its original decision on what telecommunications network operator Chorus can charge its customers, though it probably won’t backdate any update. More>>

ALSO:

Lower Levy For Safer Cars: ACC Backtracks On Safety Assessments

Dog and Lemon: “The ACC has based the entire levy system on a set of badly flawed data from Monash University. This Monash data is riddled with errors and false assumptions; that’s the real reason for the multiple mistakes in setting ACC levies.” More>>

ALSO:

Fast Track: TPP Negotiations Set To Accelerate, Groser Says

Negotiations for the Trans-Pacific Partnership will accelerate in July, with New Zealand officials working to stitch up a deal by the month's end, according to Trade Minister Tim Groser. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news