Chairman of Towergate Partnership clarifies stance on broker commission transparency
Broker commission transparency will become “inevitable” in the UK insurance market, according to chairman of Towergate Partnership Peter Cullum.
In what is thought to be the first clear indication of the company’s stance on commission disclosure, Cullum admitted that Towergate believed it would definitely be introduced into the market.
During a panel discussion on the opening evening of this year’s Biba conference, he said: “[Broker commission transparency] will be inevitable and will happen over time.”
But he insisted that full transparency was needed across the industry and called on direct writers to disclose their marketing spend to make it a level playing field for all companies.
Cullum added. “Insurers should also be transparent with their expenses as there are huge inefficiencies with expenses.”
His comments came as the panel, which also included AIG president Martin Sullivan, Dennis Mahoney, chairman of Aon Global, and Lloyd’s chief executive Richard Ward faced questions about the future of the distribution market.
Sullivan admitted: “The distribution model is going to change and in five years’ time we will be having an interesting debate as to what has happened.”
Cullum emphasised the importance of distribution when he added: “I said in 1996 when I was working with Robert Hiscox [chairman of Hiscox] that there were three things we had to try and get right: distribution, distribution and distribution, and if we got one of those right then we would be successful.
“The next five years are going to be very, very interesting in how distribution changes.”
But, he warned brokers: “If you don’t invest in e-trading then you are going to be looking like dinosaurs in five years’ time.”
