Chubb will reduce brokers’ base commissions on its Masterpiece home and contents product from June 30.

The insurer told intermediary partners about the change last Friday evening in an update seen by insuranceNEWS.com.au.

Masterpiece is Chubb’s “prestige” offering, aimed at clients with home insured sums of $1.5 million or more, the company’s website says. 

The insurer’s head of international personal lines for Australia and New Zealand Angela Capponi says in the update: “We understand the challenges in the homeowners insurance market over the past few years … to reduce the ongoing pressures of increased pricing on our mutual Masterpiece clients, and to continue to provide the quality of service and long-term sustainability of the Masterpiece portfolio, we will be making some adjustments to broker commissions.”

The new rate will apply to new business and renewals. One broker told insuranceNEWS.com.au that the new rate is 14%, but another said it was 16.5%.

“Chubb’s new business or renewal terms will include your new commission rates and acceptance of these terms includes your agreement of these new commission rates,” the update says.

insuranceNEWS.com.au has approached Chubb for comment.

The insurer currently pays a base commission of 20% on Masterpiece policies, a NSW broker who has clients under the cover told insuranceNEWS.com.au.

“Chubb writes high-end homes … they’re expensive houses. Those policies generate a fair bit of premium, so it’s not uncommon to be paying $10,000 or $15,000 in base premiums.

“You’re insuring really rich people who have got high expectations.”

The broker says Chubb has raised premiums on Masterpiece polices “but from my understanding, it doesn’t seem enough” for the product. 

Masterpiece is Chubb’s only home and contents product in the Australian market. In March last year, it withdrew its offering for properties with sums insured below $1.5 million.