Brokers Ireland Strongly Refute the Claim that Insurance Brokers are Involved in Anti-Competitive Practices
Thu Aug 15 2019
Following press reports this morning based on recommendations made by Business Minister Heather Humphreys for the CCPC (Competition and Consumer Protection Commission) to investigate insurance price-fixing allegations and in particular reference to the role of Brokers, Brokers Ireland have issued the following press release which has been circulated to all media agencies.
Brokers Ireland strongly refute claims that Insurance Brokers are involved in anti-competitive practices or in ‘cahoots in ripping consumers off’. “These are absurd and unfounded suggestions”. Cathie Shannon, Director of General Insurance at the organisation, which represents 1,250 Broker firms, said premia are set by insurers, not Brokers.
“Public liability and all other insurance premia are a matter for insurers,” she said. “In dealing with insurers, it is the role of the Insurance Broker to represent the interest of the business or consumer and advise them on best value to meet their needs, she said. Our Members are highly regulated by the Central Bank and it is the interests of the customer which are always to the forefront of our Members’ considerations. Rising insurance premia in some sectors, including the public liability sector, are not due to Insurance Brokers, who are as frustrated as their clients on the rising costs to individuals and businesses. It is already a difficult trading market for Insurance Brokers, with fewer carriers in the market offering less choice and it is simply not in the interest or to the benefit of Insurance Brokers to seek increased premia.
“The role of an Insurance Broker is to offer expert, impartial advice to individuals and businesses by researching the market. Insurance Brokers have access to a variety of insurers’ products though comparing various product offerings and negotiating with insurance companies on behalf of their clients. Insurance Brokers always offer the best advice on service providers and the best cover rate from the most suitable provider. They enable people to make informed decisions to achieve optimum outcomes. “This is the whole basis on which our members operate. It is through the quality of this work that they gain and grow their reputations”. She stressed that Brokers Ireland members are not tied agents, they do not work for any particular company or product provider. “It is a fact that a business or individual taking advice from an Insurance Broker when seeking insurance will be in a better position than those who do not. Direct providers and tied agents simply do not offer the expert service and impartial advice an Insurance Broker offers.” ‘The suggestion that Insurance Brokers ‘hiking premium prices’ is nonsensical and has no basis in fact. If Insurance Brokers were to seek increased premia, this would only serve to drive consumers directly to insurers and other intermediary channels and undermine the very business existence of Insurance Brokers’. It would remove impartiality and choice for consumers.
Brokers Ireland demands that the reforms sought by the Costs of Insurance Working Group, particularly those associated with improving the personal injuries claims environment, be brought in as soon as possible, as this may well have a positive impact and assist in addressing some of the factors giving cause of concern, including high premia and lack of capacity in the public liability insurance market.