Something that has really struck me is the depth of feeling about the issue, as the discussion at our convention at Harrogate in November showed. The lack of professionalism that it reveals damages the whole of the industry, including insurance and risk managers.
Now is not the time to stomp on the brokers. That would not help any of us. Instead, AIRMIC will work positively as the voice of the commercial insurance buyer, including those who are not AIRMIC members, to improve transparency in the insurance transaction. We want to influence the changes that will inevitably take place in the brokers' business model.
We will do this in several ways. We are setting up a task force on the issue and welcome member participation. One of the roles of the task force is likely to be the development of a list of questions that any insurance buyer can use to clarify how the broker will be paid. These questions should be especially useful for small and medium sized companies that do not employ a professional risk manager. The buyers with the biggest muscle are better able to insist upon fairness and transparency, but this should be the automatic right of all.
We are also raising the issue with the Financial Services Authority (FSA) and the broking and underwriting communities. AIRMIC will work with other risk management organisations, to express the views of the commercial insurance buyer.
No-one is hiding the fact that placement service agreements (PSA) and contingent commissions were practised in the UK, although I do not think there is currently any evidence that practices were as extreme as some of those reported in the US. Ultimately, we hope to see greater transparency and a reduction in the sort of inefficiencies that these practices may have encouraged.
Finally, I would like to encourage AIRMIC members to get next year's conference into their diaries. It will be held from 13-15 June in Brighton, and I am sure our continuing relationship with brokers, who have been among the major supporters of this organisation, will be a subject for discussion.
