April 13, 2020 by Adam Malik
Some brokers will be getting their commission payments sooner from Travelers Canada, the company announced just before the Easter weekend. The move is being applauded by the Insurance Brokers of Canada (IBAC).
Those who are on an annual payment system as outlined in their contract will be getting a percentage of their payments ahead of schedule. The move follows a similar announcement made by the company’s American arm about a week earlier.
Information provided to Canadian Underwriter from Travelers explains that commission payments will cover April and May but will be based on the contract the company has with individual brokers. So while those who receive annual commissions will get their commission payments ahead of time, brokers who receive quarterly payments or have their payments structured differently may not qualify.
Payments are expected to be made between mid- to late-April.
This offer is only available to Canadian brokers with an in-force book of business with the company and who have been working with the company for a number of years. The percentage is accrued from those previous years; so the company will generally look at what the broker has amassed during this same time period and use that as a template to determine the accelerated payout.
The company noted that a majority of brokers are small business owners and are feeling the effects of the COVID-19 pandemic when it comes to cash flow. Travelers is hoping to alleviate those pressures by making these payments ahead of time so that they can focus on assisting clients rather than having to worry about business concerns.
“As part of our ongoing COVID-19 relief efforts, Travelers Canada is standing by its broker partners,” Heather Masterson, president and CEO of Travelers, said in a media advisory. “Many of our brokers are small business owners and are facing financial challenges due to the pandemic. This plan will help ease near-term cash flow challenges, so brokers can continue to focus on providing their invaluable care and counsel to customers.”
IBAC CEO Peter Braid welcomed the “innovative approach” from Travelers, telling Canadian Underwriter that the broker channel has been shown a strong signal of support thanks to the move.
“This important initiative by Travelers recognizes the difficult economic environment that we’re now working within,” Braid said. “These accelerated payments will help to inject capital into brokerage operations and allow brokers to stay focused on what they do best – serving the interests of their customers. In fact, in these challenging times, the role of the broker as an advocate for their client has never been more important.”
While the accelerated payments cover the spring months, the company will review its plan if the pandemic extends further. It will monitor the environment as well as take in feedback from brokers to evaluate future plans.
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