Friday 21 November 08 - 23:38
 

Bevis Marks

A question of commissions

The question of commissions in insurance is sensitive, in relation to the amounts which are paid to brokers. Insurance brokers for ports and terminals are specialists. They can earn as much as 20% of the premium paid, especially if there is a chain of intermediaries involved.

They come in two basic sizes, small and specialized based usually in a single office, or large and multifaceted and based in a maritime centre near you. AON, Marsh and Willis all have good people in these roles and they would be unbeatable if they could get to grips with the problem of the profit centre doctrine. I am the AON man in the marketplace and I know my customers well. The major international markets for port insurance are in places like New York, London and Rotterdam. So in order to access them I may perforce have to use my office in the city concerned and thus share my brokerage with them. Such offices are called wholesale offices. They are not always very popular with the offices in the field and the worst thing you can say about them is that they have a tendency to tell the retail or primary broker what he will get, rather than accommodate them as their internal customer.

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