"It doesn't make sense." This was what Lloyd's
CEO, Richard Ward, had to say last year on the topic of how, in the
UK, brokers are generally remunerated by underwriters rather than
their clients. Ward's comments sparked some debate in the
industry on best practice for broker remuneration. In this article
we explore recent developments in both the UK and UAE surrounding
remuneration issues and broking practices.
New Lloyd's bulletin on broker remuneration
On 1 March 2012, Lloyd's Market Bulletin Y4567 in respect of
distribution costs, broker remuneration and additional charges came
into effect, aimed at Lloyd's Managing Agents and affecting the
brokers with whom they deal.
Interestingly, despite Ward's comments on broker
remuneration practices, the bulletin stresses that
"Lloyd's does not seek to interfere with the agreement
of commercial arrangements in the market...", but
acknowledges that as remuneration arrangements are constantly
evolving, then so too must
