Analyst Max Franchitto has suggested insurance brokers “are a species unto themselves” when it comes to how they opt to charge their clients.
His comments, to sister publication Insurance Business, come straight after he invoked outrage by suggesting mortgage brokers run the risk of looking like sales reps if they don't charge a fee-for-service,
“General Insurance brokers are a species onto themselves, so commissions are there to stay unless actuaries can improve premium competitiveness by deleting them,” said Franchitto.
“Fee for service would only apply to those brokers that are sophisticated enough to be risk advisors not just insurance placement services.”
Franchitto said that when brokers in the general financial services sector use a commission-based model they can appear looking like “mere sale reps”.