Anurag Kotoky

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Willis – Just say no to contingents

July 30, 2010

The return of contingent commissions to the insurance brokerage business has provided one company with an opening to differentiate itself – by not accepting them.

Insurance brokers are middlemen between insurance companies and insurance buyers. They’re supposed to act in the interest of the buyer, but they can receive “contingent” commissions by steering a certain amount of business to the companies.

The practice was banned five years ago after an assault led by Eliot Spitzer, riding high at the time as New York’s attorney general and the “sheriff of Wall Street.”

But now the practice has returned from the dead, and two top players – Aon and Marsh & McLennan – are taking steps to return to it.

That gives another company, Willis, an opening to differentiate itself by advertising that it refuses to sully itself with such a conflict of interest. As other companies made clear that they were moving back to accepting the payments, Willis fired off a press release blasting the practice.

“Clients` best interests are served when their brokers work for them, and only them, with standards of service based on ethics and integrity, not merely on what`s legally permissible, Willis said.

Willis even has a website, www.clientsbeforecontingents.com, that promises “to give you a voice and a platform to take a stand against contingent commissions.”

As Keefe, Bruyette & Woods analyst Clifford Gallant put it, “They are putting themselves (forward) as a company that is a little different and that is serving the customers’ needs and only the customers’ needs.”

  • About Anurag

    "Anurag covers money, politics and general news based in New Delhi. He joined Reuters in 2008 in Bangalore and covered U.S.-based companies for a little over two years. In the Indian capital, he covered the dynamic Indian aviation industry before moving to his current role. Born and brought up in the beautiful town of Jorhat in Assam, Anurag loves cricket, Bollywood and is a social media addict. When he’s not chasing high-flying CEOs and bureaucrats, Anurag likes to unwind with films and Assamese poetry."
    Hometown:
    Jorhat
    Joined Reuters:
    2008
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