"Don't blame the broker," is Mr Derek Fitzgerald's response to the Competition Authority's preliminary report on competition in the non-life insurance market.
Mr Fitzgerald is managing director of Fitzgerald & Harnett, an insurance broker based in O'Connell Street, Dublin. He has been in the business for 30 years.
The Competition Authority's criticisms of how competition works at the broker end of the market bear little resemblance to brokers' day-to-day business, according to Mr Fitzgerald.
"I thought it was completely one-sided and it reflected the views of the top business men in the country," he says.
Bigger businesses have seen their motor, employers' liability (EL) and public liability (PL) insurance premiums "go through the roof". Mr Fitzgerald is sympathetic but says "the broker is a handy whipping boy".
Brokers' commissions have nothing to do with the cost of insurance, he says. Rather, it is the number of companies in the market that is the main problem.
"If you're looking for EL and PL, there is only one company, at the most two, that will even look at you. There's no point in ringing up the rest. A broker can't force a company to quote."
Insurers are cherry-picking the small businesses they want to insure, Mr Fitzgerald says. "If you're an insurance company, you should have to quote for everything, that's my view. That would start competition."
But at the moment, competition between insurers is "non-existent", he says.
The authority's report found there was little competition and a lack of transparency among brokers' commissions, noting the potential conflict of interest between their obligations to provide "best advice" to clients and incentives from insurers to steer a minimum volume of business in their direction.
Brokers associations have disputed these findings. "It is our clients that we look after," says Mr Fitzgerald, who is on the general insurance committee of the Professional Insurance Brokers' Association (PIBA).
His own clients are small, mostly family, business owners: nobody who would pay six figures in insurance every year.
But if someone was to pay a liability premium of €100,000, on which he would receive commission of 7 per cent from the insurer, Mr Fitzgerald says he would refund some of the €7,000 commission to the client.
"I would certainly not take all of that, I would pass some of it back to the client. But on the rest of the market, it wouldn't be worth it," he says.
For sourcing the best motor insurance quote for a client, Mr Fitzgerald might receive a 5 per cent commission, or €25 for a premium of €500, not exactly a huge profit for the work involved.
"Most of my clients only pay €5,000-€6,000 [in insurance premiums] a year. They understand the broker has to live and has to make a profit."
Regulation of the non-life insurance market is not as stringent as it is for life assurance brokers, Mr Fitzgerald admits. But he welcomes the Irish Financial Services Regulatory Authority's plans to converge the rules, saying it will put brokers on a level playing field with banks and insurers' direct sales forces.
