Groupama creates tailored SME service for brokers

The insurers said that whether business is transacted traditionally or online via Optima Online, the company's extranet trading platform, the move would enable brokers to provide a more tailored service to small to medium sized enterprise (SME) customers and also enable them to dispense with service charges where it fitted better with their trading model.

Malcolm Smith, Groupama Insurances' commercial lines director said: "The current remuneration structure for commercial insurance is extremely complex. Commission varies by product, class and trading relationships.

"But for smaller SME business, brokers often find commission levels inadequate to cover their costs of managing the client and have to apply 'service charges' to supplement commission. In response to broker feedback for a simpler and more flexible reward structure we are launching a variable commission option as a standard part of our commercial product range."

Groupama said each of its commercial products would carry a default commission level but where required, brokers will be able to select an alternative amount of commission from a specified range subject to premium adjustment. It added that premiums net of commission would remain constant with adjustment to gross premium to reflect the lower or higher commission rate.

Mr Smith concluded: "Ultimately, we think that individual brokers are in the best position to assess the cost of handling a particular policy and, where necessary, to justify their remuneration to the client.

"From an insurer's perspective, it is the net underwriting premium and the business quality itself that is all important to our bottom line result. Offering a variable commission option gives brokers greater control over the way they conduct their business and can help them to operate profitably in accordance with FSA requirements.

"At Groupama we are keen to respond to brokers' needs. This move is clear evidence of this desire and is part of our continuing drive to make it easy for SME brokers to do business with us."