Risk managers are losing their trust in insurance brokers, fearing their advice might be biased by incentive payments made to the brokers by insurance companies, says the Association of Insurance and Risk Managers (AIRMIC).
The association polled over 100 risk managers and found none believed that brokers reveal the total commission and incentive payments they receive from insurers.
The survey also revealed fewer than 4% of risk managers have any real knowledge of incentive payments given as commission to brokers.
AIRMIC’s executive director Ian Barker expressed his concern that ‘brokers’ lack of clarity on the issue could be clouding the principle of best advice, as required by their code of practice.
‘These concerns are fully justified. Pressure to provide additional incentive payments could have a significant destabilising influence on good underwriting practices,’ he said.
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