The cost of insurance to the client company,buyer of Insurance, should go up if the carriers do not reduce the premium on the basis that their expenses are going down since they are not paying contingents.The whole concept of managing the buying process will have to be revisited since Underwriters will have to be educated as well.
I would think the price for Insurance would decline once the amount of the Contingencies are factored in to the bottom line for the cost of Insurance. Hopefully, the Insured will lower the price of their products to their customers and everyone will win.
It’s hard to imagine Insurance agencies just accepting the loss of a large percentage on their net income. As we all know Companies have been lowering commissions steadily over the last 15 years. Profit Sharing agreements for alot of Main Street sized agencies are the difference between making a profit or not. If these contracts become “illegal” then the agencies will be encouraged to not always offer their customers the lowest price but to offer the company with the highest up-front commission or add on “brokerage fees” just to financially survive. Then the companies will adjust to the new rules and get in a bidding war based on up-front commissions instead of commissions plus profit sharing. I don’t think the savings will be passed on to the consumers– it will just be readjusted to comply with what ever new laws are enacted.
The cost of insurance to the client company,buyer of Insurance, should go up if the carriers do not reduce the premium on the basis that their expenses are going down since they are not paying contingents.The whole concept of managing the buying process will have to be revisited since Underwriters will have to be educated as well.
I would think the price for Insurance would decline once the amount of the Contingencies are factored in to the bottom line for the cost of Insurance. Hopefully, the Insured will lower the price of their products to their customers and everyone will win.
It’s hard to imagine Insurance agencies just accepting the loss of a large percentage on their net income. As we all know Companies have been lowering commissions steadily over the last 15 years. Profit Sharing agreements for alot of Main Street sized agencies are the difference between making a profit or not. If these contracts become “illegal” then the agencies will be encouraged to not always offer their customers the lowest price but to offer the company with the highest up-front commission or add on “brokerage fees” just to financially survive. Then the companies will adjust to the new rules and get in a bidding war based on up-front commissions instead of commissions plus profit sharing. I don’t think the savings will be passed on to the consumers– it will just be readjusted to comply with what ever new laws are enacted.