Hollard has cut broker commissions for home and landlord products while QBE has confirmed it will reduce the maximum commission rate for its home offerings sold through the Steadfast Client Trading Platform (SCTP). 

Blue Zebra has also announced changes to its commission structure for home and landlord products on the SCTP, reducing it to 20% on January 1 from a maximum 25% presently. 

The commission changes come as the homeowners/householders line continues to lose money despite sharp rate increases. Australian Prudential Regulation Authority (APRA) data shows the line’s underwriting loss worsened to $205 million in the 12 months to June 30 from $199 million a year earlier. 

Hollard says the commission changes are part of its ongoing work to continue delivering “competitive and sustainable” insurance solutions for customers in the current environment. 

“The impacts of inflation, increasing frequency of natural disasters, continued interest rate increases and significant supply chain challenges following Covid-19 have all contributed to an environment where affordability of insurance premiums remains under pressure for many people,” Hollard says in a statement to insuranceNEWS.com.au. 

“The accessibility and affordability of insurance for Australians continues to be an ongoing industry wide concern and focus for regulators and government bodies. 

“Hollard remains committed to supporting brokers in the valuable role they play in the industry, and investing in our systems, people, and processes to improve customer experiences.”

The commission changes took effect on December 1 for new business, according to a copy of the Hollard update to its SCTP intermediary partners seen by insuranceNEWS.com.au. 

The update said the changes will apply to renewals released on or after December 1, with an effective date of January 12 onwards. 

Hollard said in the update it has agreed with Steadfast to reduce the maximum commission rate payable to 15%. It did not mention the old rates and brokers said it was at least 20%. 

“We want to remain committed and focused on the broker market, and our aim is to give you more choices as a broker and remain a viable option for your clients,” the update says. 

“Doing so involves a number of measures including increasing premiums and changes to our risk appetite, along with sum insured indexation increases. Unfortunately, these are not the only means of maintaining a profitable product. 

“Despite these measures, we continue to experience pressure on loss ratios. So, together with Steadfast, we’ve agreed to reduce the maximum commission rate payable to 15%.” 

The update says in 2022 Hollard’s claim payments increased to $163 million from $78 million in 2021, an increase of 109%. 

QBE confirmed it has adjusted the maximum commission on home products sold via SCTP to 17.5%, effective March 1 next year. The current rate is 20%. 

“QBE regularly reviews broker commissions on all products. Our impending adjustment to the maximum commission on home products sold through the SCTP… will align SCTP to our standard market commission,” a spokesperson said. 

“We greatly value the relationship between Steadfast and QBE, and will continue to support brokers during this transition.”