Throwback Thursday: Broker pay threat & motor premiums hike

12 August 1971: Broker pay debate

The British Insurance Law Association met at University College London to discuss licensing, marketing practices and how much brokers got paid.

Professor Simon Fredericq of Belgium pointed out there were virtually restrictions on insurance intermediaries in his country but since 1961 brokers had to give evidence of knowledge and complete a training course.

As the UK’s entry to the European Economic Community was likely to lead to an Insurance Directive, the lawyers considered whether the government could be give power to limit how much brokers get paid.

Following the Grenfell Tower fire, the Financial Conduct Authority published a report in 2023 revealing a sharp increase in broker commissions for arranging leasehold property insurance. 

The FCA’s findings led to criticism from the government and recommendations for brokers to stop paying unjustified third-party commissions and increase transparency.

Motorists complain

Motorists who had faced premium increases of 75% to 100% over two years were complaining to their insurers, Post reported.

The fact there weren’t even more complaints was deemed by Post’s reporter to be testament to the work of the British Insurance Association and “bears out the wisdom of insurers declaring their UK underwriting results”.