A multi-award-winning broker has called on others to join NIBA, saying that representation has never been more important as the industry enters an era of increased scrutiny and onerous legislation.
Rob Cooper is the director of CPR Insurance Services and has repeatedly featured on the Elite Brokers list – speaking to Insurance Business, he warned that 2020 will bring some of the biggest challenges ever seen by the general insurance broking industry.
“We are about to be swamped by massive amounts of legislation – all consumer-driven, by the small percentage of other financial services industries that have been caught out providing unethical and immoral services to many consumers,” said Cooper.
In 2020, claims handling is set to be categorised as a financial service, anti-hawking changes will hit mid-year, and firms will be forced to implement a whistle-blower policy. The following year, design and distribution obligations will be fully enforced while unfair contracts proposals will come into play.
Of course, that’s not all – insurance premium commissions could soon disappear after the Royal Commission highlighted “conflicted remuneration” as a possible reason for bad behaviour in the financial sector.
“We have been put on notice that insurance premium commissions may be banned in two years’ time, if politicians and consumer groups get their way,” said Cooper.
Cooper, along with many other brokers, is against the removal of commissions – however, he says the onus is on the insurance industry to prove the remuneration strategy doesn’t lead to a conflict.
“We will have to provide a very convincing argument about why this will be detrimental to the risk economy, in particular small to medium business,” he said.
“While we know that the ability to educate new and existing clients about their risks will become difficult if this occurs, it is likely to have a huge effect on many broking businesses.”
Cooper also pointed to a string of other issues which are plaguing the insurance broking community, including North Queensland insurance affordability, the effects of climate change, regressive taxes on insurance, and the emergency services levy paid by clients with property insurance in NSW.
“We need people to speak on our behalf,” said Cooper. “Who is going to represent us insurance brokers? Who is going to be our spokesman about our concerns? Who is going to navigate their way through this legislation and give us guidance on what we need to do now to be compliant with all these new laws? Who is going to help us prevent unnecessary legislation coming in?”
For Cooper, the answer seems clear – the National Insurance Brokers Association (NIBA) and its figurehead Dallas Booth.
“I am shocked to hear that not all insurance brokers are members of this very important organisation,” Cooper told Insurance Business. “We all need to be members so that when they speak up and give our point of view on legislation that is going to be costly, difficult to comply with and detrimental to our clients, they have credibility to go with what should be your concerns.”
According to Cooper, policymakers can quickly undermine an argument from NIBA if the association only represents 50% of the industry – however, that’s harder to do with more ingrained support from across the sector.
“All this legislation, that we call red tape, costs us all greatly in the cost of doing our business,” said Cooper. “It is not easy just to pass this on to the consumer. We need the protection of NIBA.”
