Some Steadfast brokers are on the warpath over the latest cut to commission levels – and their fury isn’t just directed at the insurer concerned, but also their allegedly “out of touch” network chiefs for accepting the change. 

As insuranceNEWS.com.au has reported, Hollard this month slashed its commission on intermediated personal lines business from 15% to 10%. The insurer offers these products exclusively through Steadfast and, along with QBE and Blue Zebra, provides an important householders option on the Steadfast Client Trading Platform.

Steadfast CEO Robert Kelly last week wrote to the network outlining the reasons for the group’s “reluctant acknowledgement” of the drop.

He explained the profitability challenge insurers face on home insurance and that Hollard paying 15% had become “unsustainable”. He also noted that, due to soaring premiums, brokers’ commission revenue on domestic business has almost doubled in the past five years.

“We’ve long signalled that the persistent challenges in the domestic insurance market – amplified by growing scrutiny from consumer groups – would inevitably necessitate a review of remuneration structures,” he wrote.

“We believe that a 10% commission level represents not only where the market is heading, but also the most viable path forward.”

However, brokers who spoke to insuranceNEWS.com.au last week were not happy with what they heard.

Commission revenue might have gone up, they say, but so too have costs. The work required on claims has spiralled – thanks in part to what brokers describe as dismal claims service from insurers. Some brokers point to Hollard as having been a particularly poor performer in this area, making its commission cut even harder to swallow.

They insist 10% just isn’t enough, and many are angry at Steadfast for not putting up more of a fight. Some accuse the network of being “confused” because it has one foot firmly planted in the underwriter camp these days.

“Five, 10 years ago, Robert would have jumped up and down and demanded insurers don’t drop their commissions,” one said.

But Mr Kelly isn’t having it, and in an interview with insuranceNEWS.com.au defended his position and Steadfast’s record supporting its brokers.  

He argues that the rise of consumerism and climate-related challenges to home insurance profitability have “changed the game”.

Hollard’s concerns over sustainability are legitimate, he says, and the alternative to accepting the commission drop would be to lose the insurer altogether. Mr Kelly adds that while Hollard has had some issues with claims it has "endeavoured to fix that" and "got over the top of that mountain".

insuranceNEWS.com.au understands Hollard is not the only insurer struggling to make the product work. Blue Zebra is still searching for new capacity. Vero’s decision to walk away from the intermediated personal lines market in 2021 is still fresh in the memory, and rumours continue to swirl that QBE is about to do something similar – although neither the insurer nor Mr Kelly would comment categorically on that.

Mr Kelly says consumer groups and regulators are keeping an ever-closer eye on retail insurance and whether customers get a fair deal, and he believes it is important to match the acquisition cost insurers build into direct business – which he estimates at about 10%.

“We have to be competitive in that cost of distribution, equal to what [insurers] would have to pay if it was a direct client. So that’s how you get to that 10%.”

Mr Kelly says with new commission consent laws about to come into effect, “it’s better to get on the front foot”.

“Consumerism is the umbrella under which we have to operate. You have the consumer groups and [competition commission] looking carefully at insurance distribution and the cost in the insurance system.

“The sticking point at the moment is the consumer can’t afford to pay their household policy, and we are one of the large costs in that process.  

“At 10% it’s very, very defensible against any consumer group, the [competition watchdog] or, indeed, the consumer.”

Mr Kelly says brokers retain the option of charging a fee to make up for reduced commission. “That’ll be up to the broker and the consumer to work out, but that is a mechanism that they’ve had all along.”

He takes issue with the criticism levelled at Steadfast and his approach, and says comparisons with years gone by are not helpful.

“I remember General Accident paying me 33% commission on household insurance, back in the 1970s. But you can’t look at three or four decades ago, the way you operated, and put it into 2025. The game has changed.”

He says Steadfast’s expansion into underwriting agencies – far from distracting from its broker focus – has been a huge help to members.

“People who think we are supporting the insurers and have lost track of what’s going on don’t know how hard we’ve worked to try and maintain a line of insurers who will actually write broker business.  

“Whoever made those comments just doesn’t understand the rigours of how we run the business.”

Some brokers have accused insurers of wanting to push intermediaries out of personal lines, because they fight for better claims outcomes for clients, and Mr Kelly understands that line of argument.

“There may be a lack of wanting brokers involved because of their ability to point out when a claim should or shouldn’t be made, but at the moment, we should hang on to the [insurers] that are offering to still write our business and pay us 10%,” he said.

“I would remind the people that are saying they can’t operate on 10%, that 10% is a lot better than nothing.”

In his note to the network, Mr Kelly says Steadfast is working on “a new service for our members that will provide faster and easier access to domestic products”.

He declined to give more details, aside from adding it “won’t be paying big commission, but it will probably give [brokers] access to other markets”.

Mr Kelly believes it is “critically important” that consumers can arrange domestic insurance through their brokers – because it gives them access to valuable advice and an advocate at claims time.

But he says the challenges insurers are facing are real – and so is the possibility that they walk away.