Insurance buyers favour automatic disclosure of broker remuneration
Directors’ and Officers’ (D&O) insurance and claims performance are now among the issues that keep risk managers awake, according to a survey of AIRMIC members. The findings show that these issues rival reputation and business continuity at the top of the ‘league table’ of their concerns.
19% of AIRMIC members rate reputational risk as their number one concern, followed by D&O (17%), business continuity planning (15%) and claims performance (11%).
However, when asked to rate their top three concerns, claims performance comes out well ahead of the others, being mentioned by 57% of members. At the same time, risk managers have hardened their support for the development of a claims performance index since last year. 82% favour the idea (69% in 2007) with just 8% opposed (12% in 2007). Just over half of members (53%) rate their lead insurer’s performance either ‘excellent’ or ‘good’ when it comes to the speed and accuracy of claims payment.
Regulatory compliance on international programmes is also of growing importance, with 56% saying their level of concern had risen in the past twelve months.
% of AIRMIC members rate reputational risk as their number one concern, followed by D&O (17%), business continuity planning (15%) and claims performance (11%).
The findings demonstrate that only a minority of insurance buyers (9%) have agreed to allow the brokers to retain additional brokerage in full when asked. Most (56%) have negotiated a smaller amount, whilst a significant minority have refused to pay any extra at all.
Support for automatic disclosure of broker remuneration is at an all-time high at 67%. Making disclosure mandatory, but only on request, had the support of a further 24%. More than two thirds (71%) rate their brokers as ‘excellent’ or ‘good’ in this respect, about the same as last year, with just 6% describing them as ‘poor’.
The responses show that most risk managers expect the main classes of insurance (except D&O) to be about the same in two years’ time, but with a significant minority expecting prices to rise.
The survey took place earlier this month with 157 AIRMIC members taking part.