Commission in the health and protection market is “bound to be” on the Financial Conduct Authority’s (FCA) radar and “must be the right value for customers”, Aviva has said.
The insurer emphasised that it had “no concerns” over commission in the health insurance market at present, but noted its was higher for individual protection, although this reflected the sale process.
The comments came in response to the Health & Protection interview with Aviva’s incoming managing director of protection Fran Bruce where she noted the future of adviser commission in the protection market maybe under the regulator’s microscope.
Aviva UK Health managing director Steve Bridger was questioned on the subject at the Association of Medical Insurers and Intermediaries (AMII) Health and Wellbeing Summit today.
Citing Bruce’s comments regarding the protection sector, Premier Choice Healthcare executive director Claire Ginnelly asked Bridger: “Are there any conversations happening in the healthcare side of Aviva where you’re also thinking that in the future commission may be slightly different to how it is at the moment?”
Bridger (pictured) replied: “Obviously the FCA consumer duty will be the real guide for that which will be June when we’ll get the outcome. Commission is bound to be on their radar.
“If I’m really honest, the commission strain on health is not massive. The commission strain on group protection will be even lower, [but that is] different for individual protection but then you’re having a fully advised conversation.”
He continued: “Your experience, your background, everything you do as an adviser has to be monetised.
“It doesn’t mean commission is a bad thing. It’s got to be the right value and the right value for the customer so it isn’t as prohibitive as going direct.”
Bridged added that Aviva “absolutely need advisers and intermediaries to exist” but there was a balance and a challenge between the direct and advised offerings.
“So if customers are happy to go direct or for a more suitable product and they don’t want advice then why wouldn’t we [offer that]?
“But really our focus is on the intermediary space and recognising that commission is not a cost, it’s a part of value of that sale.
“But from a healthcare point specifically, we’ve got no concerns right now on those levels of commission.”