Anurag Kotoky's Profile
Willis – Just say no to contingents
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.”