Conning Research: Boundaries Between Agents, Brokers and Insurers being Redrawn — Brokers Will Feel the Squeeze

(Hartford, CT) February 14, 2005 – In the wake of investigations into broker practices in the commercial insurance industry, a redefinition of the roles of broker, agent and insurer may be underway, according to a new study by Conning Research and Consulting, Inc.

“Insurers may view this market situation as an opportunity to get closer to their clients,” said Stephan Christiansen, director of research at Conning Research & Consulting. “The clients, on the other hand, will be looking to ensure that the bidding process is more favorable to them.”

The Conning Research study, “Prospects for Agents and Brokers: Producers, Consultants, or Distributors?” reviews the historical backdrop to the current industry structure and pricing practices, offers an overview of the investigations and regulatory initiatives underway, and provides a look ahead at likely changes and challenges to the commercial insurance industry in particular. The study also provides discussion of possible impact on personal lines, benefits and life insurance distribution.

“To regain a profitable business model, the broker needs to redefine its role through service enhancement and, of course, greater transparency in the bidding process,” said Christiansen. “They need to once again differentiate their role from that of the agent. If the broker cannot make the business case to clients that they add value in the transaction, they will not be able to make up for the loss of contingent commissions. On the other hand, it is not necessarily a given that contingent commissions are gone for good, particularly in some markets. These structures may make more economic sense than current conventional thinking suggests. Our study presents a number of possible futures for these relationships and the pressures that the industry will face now and in the future.”

“Prospects for Agents and Brokers: Producers, Consultants, or Distributors?” is available for purchase from Conning Research & Consulting, Inc., by calling (888) 707-1177 or by visiting the company’s Web site at

About Conning Research & Consulting, Inc.

The Conning name has represented excellence in independent insurance industry research for more than 90 years. As a result of its wealth of experience and intimate knowledge of the insurance industry, Conning understands industry challenges and opportunities and can provide in-depth insights and analyses. Conning provides both public and proprietary research as well as consulting services to the financial services industry. Conning is headquartered in Hartford, CT.