'No commission' structure doesn't translate
Dan Donaldson runs InsuranceBroker.kiwi, a fire and general business that charges clients a fee, rather than accepting any commission payment from the insurer.
How much a client pays is determined in negotiation with them. Donaldson said he did not like to work with hourly rates because they did not create the right incentives, but tried to work towards a set price for each client based on their needs.
Donaldson said clients wanted more transparency. He said it did not make sense that what a broker was paid would vary with the movements of the insurance market – fire and general premiums have fluctuated over recent years, particularly as a result of the Christchurch earthquake.
“I’ve found that commission creates a conflict of interest around those cycles. Just because premiums have gone up doesn’t meant the broker has done more work. I would rather remove that from the discussion.”
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