Non-cancellable broker contracts needed for market stability

In order to achieve market stability, insurers and brokers should consider non-cancellable broker-partner contracts, Paul Martin, president and chief operating officer of KRG Insurance Group, told delegates of the National Insurance Conference of Canada (NICC) in Ottawa-Gatineau, Que.
Martin spoke as a member of panel discussing the outlook for the commercial market.
Insurers should also guarantee price stability and availability in order to promote consumer financial stability and confidence, Martin suggested.
“In other words, if you’re going to write it today, I want you to write it tomorrow,” he said. “This will breed stability for consumers and raise the trust factor.”
Martin called on the industry to create non-cancellable broker contracts. “This does not mean that a company would not have the right to select the right distributor,” he said. “What it means is, I’m not sure anyone really understands the hardship that the client goes through when an insurance company and broker relationship sours and clients are thrown onto the streets.”
There should never be a cancellation due to a brokers’ volume of books changing or a change in a broker’s loss ratio, he continued.
Martin stressed the importance of solidifying the broker-insurer relationship as the industry prepares for a hard market looming on the horizon.