Insurance brokers

[BenJacobs]

Could you help me to understand how much insurance brokers / agents selling insurance get paid in either (1) fees from the client directly and/or (2) fees from the insuring company directly.
Is there a way of working this out as a %? I've heard that it's generally 180% of the annual premium, so if a £50 per month premium, then commission would be around £1,080. Is this about right? Would the broker then also charge a fee from a client?

Thank you

 

[fisicx]

Every one will be different. Each broker/estate agent will have their own fee structures

 

[tony84]

What type of insurance?
Life insurance/Critical Illness - 180% sounds a touch high, but I just say multiply the premium by 20 and you are probably not far off. If it comes off risk during the first 4 years, you would pay a percentage of that back. You would also end up losing some of that to your principle or network - anywhere from around 15-50% (depending on who supplies the customer, compliance costs, who does the admin etc).

Buildings insurance it is about 20-25% of the annual premium.

 

[BenJacobs]

What type of insurance?
Life insurance/Critical Illness - 180% sounds a touch high, but I just say multiply the premium by 20 and you are probably not far off. If it comes off risk during the first 4 years, you would pay a percentage of that back. You would also end up losing some of that to your principle or network - anywhere from around 15-50% (depending on who supplies the customer, compliance costs, who does the admin etc).

Buildings insurance it is about 20-25% of the annual premium.

Very helpful, thanks very much. Looking predominantly for insurance products related to homeowners - so buildings and contents, life insurance, income protection products, etc. Don't suppose you've got a rough idea on how much the average premium might be per month on each of these, and any I might have missed? Are all products generally speaking around 20x monthly premium?

 

[tony84]

Average life policy is about £20-30 a month so £400-600 commission
Average buildings/contents insurance policy is about £15-20 a month so £45-60 commission.

 

[BenJacobs]

Average life policy is about £20-30 a month so £400-600 commission
Average buildings/contents insurance policy is about £15-20 a month so £45-60 commission.

Thanks again. Buildings / contents insurance is around 3x monthly premium then?
Life policy, got it, thank you.
Any other insurance products that'd typically be offered to home buyers / owners?
I'm assuming an insurance broker wouldn't be charging a fee on top of these numbers, and their income is derived solely from the commissions earned from the provider?

 

[sheendirector]

Thanks again. Buildings / contents insurance is around 3x monthly premium then?
Life policy, got it, thank you.
Any other insurance products that'd typically be offered to home buyers / owners?
I'm assuming an insurance broker wouldn't be charging a fee on top of these numbers, and their income is derived solely from the commissions earned from the provider?

You are right. I am director of a mortgage/insurance broker. We don't charge client for insurance advice. I guess most others are the same.

 

[NT8SeaterTaxis]

2 or 3 years ago I moved taxi insurance to a new company. Small business, small enough that the owner himself was the one doing the quote for me in person.

Screen facing me he brought up a quote of nearly £2000. Then proceeded to take bit by bit of his commission off. Trying to beat a different quote I have. Until finally taking off around £600 all together and joking with me at least he will make something next year.

Point being he done that for me. I haven't shopped around since and always get a better quote the following year. I have and will stick with his company because if that

 

[tony84]

Thanks again. Buildings / contents insurance is around 3x monthly premium then?
Life policy, got it, thank you.
Any other insurance products that'd typically be offered to home buyers / owners?
I'm assuming an insurance broker wouldn't be charging a fee on top of these numbers, and their income is derived solely from the commissions earned from the provider?

£15 per month = £180 per year in premiums.
Commission is 25% of the £180 = £45.

You should probably look at the costs of selling these products. You have to pay the FCA based on (among other things) what you sell. If you are selling car insurance for example, you would have to pay money to the FCA, if you are selling life insurance, again you pay another bit to the FCA and so on. An insurance broker sells GI (home insurance, car insurance, PI etc) they would not usually sell life insurance.

You could be combining 2 jobs so to speak and incurring costs for both.

 

[Mark T Jones]

Thanks again. Buildings / contents insurance is around 3x monthly premium then?
Life policy, got it, thank you.
Any other insurance products that'd typically be offered to home buyers / owners?
I'm assuming an insurance broker wouldn't be charging a fee on top of these numbers, and their income is derived solely from the commissions earned from the provider?

The FCA take a dim view of double charging