OREANDA-NEWS. October 15, 2010. St. Petersburg has hosted a roundtable discussion on the topic "Insurance Company — Broker — Client", organized by the Publishing House TT Finance jointly with the Business News Agency. Mr. Vladislav Anisimov, Deputy Head for Partner Sales of ROSNO’s North-Western Directorate, delivered a speech at the event, reported the press-centre of ROSNO.

Today the intermediary channel is quite popular among insurers — according to certain expert estimates, it accounts for up to one half of all insurance services market. Given such popularity of the intermediary services in the insurance market, the "Insurance Company — Broker — Client" scheme still involves many unresolved issues, and this does not allow building a transparent and clear interaction between all participants of the insurance process. The purpose of the roundtable was to analyze efficiency of the operating procedures used by insurers, brokers and clients, identify the existing problems in their interaction and search for the ways to resolve such problems.

The event was attended by representatives of insurance companies, brokers, the Department of the Federal Insurance Supervision Agency for North-Western Federal Okrug, and the Department of the Russian Union of Motor Insurers for North-Western Federal Okrug.

All the participants of the discussion agreed that the major difficulties arise in case of operation via brokers who, in their turn, operate via their network of subagents. It is just physically impossible for an insurer to monitor operation of the entire extensive network of small subagents — the broker—s partners. Therefore, insurers often discover incorrectly issued insurance documents, incorrect records of accountable forms, violation of deadlines for insurance expertise, etc.. Mr. Vladislav Anisimov, Deputy Head for Partner Sales of ROSNO’s North-Western Directorate, noted: "The major instrument which will enable us to make fundamental improvements to our cooperation with brokers is application of strict measures controlling operations of intermediaries; such measures shall be applied jointly by all insurers. Only when the supervision of the brokers’ operations becomes a widespread practice, and when no insurer will tolerate violations, the interaction between insurance companies and brokers will become civilized and transparent. In my opinion, one of the methods for controlling the brokers’ operation may be to apply sanctions for various violations".

Violations committed by unscrupulous intermediaries may be eliminated upon implementation of mandatory licensing of the insurance brokers’ operation. A license will enable brokers as legal entities to perform insurance operations on their own. Undoubtedly, this will change a broker’s status; brokers will be liable to insurance companies, and they will have to bear all overhead costs on their own. For the insurance company, cooperation with licensed brokers will mean more transparent interaction procedures and higher degree of trust towards brokers. As Mr. Vladislav Anisimov noted, introduction of the licensing procedure may clean the market from small "phoney" brokers. However, with the emergence of licensed brokers the market situation will change in one more way: brokers will become dependent on their clients-insurants and will no more be influenced by their partnering insurance companies. Indeed, licensed brokers will be working for their clients, receiving fees from the latter. The brokers’ major objective will be to perform truly professional selection of the best market offers in terms of the price-quality ratio, thus ensuring that brokers will bear responsibility for unscrupulous and unprofessional selection of insurance companies for their clients.

Yet introduction of licensing will only partially resolve this issue, unless lawmakers make it obligatory for insurance brokers to operate under license. Only if the latter condition is met, one may expect transparent interaction schemes, real figures in the reports of insurance companies and brokers, and normal insurers’ fees, instead of the overinflated fees prevailing at present.