Steadfast says a 10% commission is the best way to ensure the long-term viability of personal lines products in the broking space, after Hollard this week announced a cut from 15%.

“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,” CEO and MD Robert Kelly says in an email to Steadfast broking partners.

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

“This is essential to ensure the long-term sustainability of these products against the direct model for all stakeholders – balancing fairness, transparency and commercial viability.”

Hollard told brokers on Monday the 10% rate will apply on its home, landlord and private motor products issued via the Steadfast Client Trading Platform.

Its domestic products sold via brokers are available only on that portal.

Mr Kelly says in the email: “We believe it is in our brokers’ best interest to look to preserve this option, hence our reluctant acknowledgement of their commission change.

“We work with our insurer partners to provide as much choice as possible for your clients, including exclusive offerings for the Steadfast network.”

He says Steadfast has seen “encouraging” growth in landlord cover on the platform, noting the addition of St George Underwriting Agency last year and that Hutch Underwriting will join in coming months.

The email says domestic insurance products face growing insurer and consumer pressure.

Premium rises have led to “some improvement” in the past year, but returns for domestic lines “remain subdued”.

Finity data shows the industry’s combined operating ratio for domestic lines is still about 100%, against the 2024-25 target of 94%, Mr Kelly says.

“Affordability remains a persistent challenge for households and insurers are sharing with us results that don’t generate the returns they need. Hollard have shared with us that this situation is unsustainable, and they with other insurers are actively reviewing all aspects of their domestic portfolios – including risk appetite, cost structures and commission models.”

Mr Kelly says over the past five years the average domestic premium on the SCTP has almost doubled from $1256 to $2418. “Based on the current commission rate of 15%, this translates to a 92% increase in commission revenue over that period,” he says.

A spokesperson for QBE – one of three home and contents insurers on the Steadfast platform – said: “Our broker partners remain a valued channel and while we don’t have any updates to provide at this time, it is standard business practice to regularly review how we operate.”

St George Underwriting Agency CEO Rowan Watson told insuranceNEWS.com.au today: “[We have] no immediate intention to reduce broker commissions for landlord and holiday products on the Steadfast Client Trading Platform. We appreciate the value our broker partners play within the insurance sector.”

IAG’s CGU says it has “no current plans to modify broker commission levels. CGU has no intention to withdraw from the market, and remains committed to continuing our personal lines offering distributed through brokers, seeing it as an important solution for their customers.”

CGU says Sunrise is its primary broking portal for personal lines distribution and it only sells domestic motor on the Steadfast platform.

Brokers have criticised the Steadfast email, which they received yesterday.

“Five, 10 years ago, Robert would have jumped up and down and demanded insurers don’t drop their commissions,” said one broker who did not want to be named. “Our costs aren’t going down. I’m not sure why we have to cop it.”

A broker in regional Victoria, who did not want to be named, says claim delays are a contributing factor in rising premiums – which adds to consumer affordability pressures.

The broker says Hollard is currently the “worst” for claims handling. 

“A lot of our time is spent chasing Hollard, so we are deserving of more commission.

“For Robert Kelly, I would hope that he is still in favour of the broker and I do believe he is … but perhaps Steadfast needs to reconsider who is on their platform and who is not.”

The broker says Steadfast’s comments on the 10% commission level are "out of touch".

“Our costs are increasing. We have to do more compliance work. The same job is taking longer … we don’t want people going to the direct market because they don’t get qualified advice …. We need to be paid adequately and fairly: 10% is just not enough for what we do. It is nowhere near enough. We can add a broker fee on top of that but it’s just not fair or viable to be at 10%.”

A broker in NSW was also scathing of the Steadfast message. 

“I think Steadfast is a confused organisation. It doesn’t know whether it’s a broker or an underwriter,” he said.