Risk advisers warn of fee sting at claim time
If risk insurance commissions are banned, most advisers believe they will have to charge a fee at claim time, according to a poll by Risk Info.
The poll, conducted last week, revealed 88 per cent felt that if risk commissions were banned, their practice would charge a fee for providing services at claim time. Only 7 per cent of respondents said they would not charge a fee at claim time, while 6 per cent were undecided.
Many advisers believe risk insurance commissions, upfront and ongoing, have subsidised the costs incurred in the time taken to recommend and review insurance as well as process claims. However, respondents to the poll revealed that while many did not want to resort to charging a fee at claim time, they were concerned that they would not be able to absorb this cost should commissions be banned and would therefore be forced to charge a fee.
One respondent suggested that clients be given the option of choosing between paying cheaper premiums with fees payable on recommendation, review and claim, having the costs loaded onto premiums to cover this service or taking out extra insurance to cover the increased cost of claiming.
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