Emirates Insurance demands a “ceiling” for the commission of vehicle insurance brokers

The Emirates Insurance Federation proposed setting a ceiling for the commission rate charged by vehicle insurance brokers, so that it is reasonable and does not negatively affect the profits of insurance companies.

An official source in the federation, who preferred to remain anonymous, told Emirates Al-Youm, “There is competition between companies, which is met with exploitation of the situation by vehicle insurance brokers, to the detriment of companies, as the commission rate reaches 30%, which is a very high rate.” Stressing that there is an urgent requirement in this regard that requires the intervention of the regulatory authority, similar to what was done in life insurance, in which the brokers’ commission rate does not exceed 5%. The source continued: “Insurance companies bear the cost of repair and compensation, while the broker only bears the cost of marketing and selling.”

He stated that it is important for the insurance sector to regulate this matter so that companies do not race to grant a high commission rate in exchange for marketing and selling policies, and there is stability that ensures fair profits for all parties.

It is noteworthy that the total commissions paid by insurance companies in the vehicle insurance branch last year amounted to 776.7 million dirhams, according to the latest data issued by the Central Bank.

According to Central Bank data, the number of insurance companies operating in the local market is 60, while the number of insurance brokers is 163, at the end of last year.