The insurance industry should abolish all contingent commissions, whether for the global insurance broker or Main Street independent agent, the chief executive officer of one of the world’s largest brokers told insurance buyers Monday.
Speaking in Philadelphia at the annual conference of the Risk and Insurance Management Society, Joseph Plumeri, CEO of Willis Group, said that “contingent commissions are inconsistent with client advocacy and unacceptable” for insurers to pay and agents and brokers to accept.
“We should abolish contingent commissions’ throughout the industry,” declared Plumeri, whose own firm has done that.
At a press conference following his speech, Plumeri urged RIMS to come out against contingencies and said it should not matter whether the agent or broker is global or local. “Why is it that it is bad for global brokers but not for the independent agent in Peekskill?” he asked, maintaining that the issue of conflict is the same, the difference is merely one of degree.
An end to contingencies was one facet of a new business model Plumeri urged for the industry. He called for transparency in transactions and compensation, more efficient policy issuance and claims service, and a bigger industry investment in technology.
But most of all, he said, the industry must have a “passion for what are the client’s best interests, all of the time, not just at sale or renewal.”
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