Home / Local / Commissions must fall, QBE chief warns brokers
10 October 2016
Reductions in broker commissions or disintermediation in some insurance classes may have to occur as insurers strive to run their businesses more efficiently, QBE Group CEO John Neal says.
He says brokers have an important role to play in the sale of commercial insurance products, but commissions higher than 25% will force insurers working in “a staggeringly competitive marketplace” to disintermediate some lines.
“For those of us running insurance businesses, the costs will have to be single-digit in my view,” he told an Australian and New Zealand Institute of Insurance and Finance conference last week.
Mr Neal suggests five key steps for insurers to survive the present market downturn: