The Emirates Insurance Federation (EIF) has proposed imposing a ceiling on the commission rate charged by motor insurance brokers.
The objective is to ensure that commission rates are reasonable and do not affect negatively the profits of insurance companies.
An EIF source told Al-Emarat Al-Youm, “There is competition between insurance companies, including exploitation of the situation by vehicle insurance brokers.” He added that in some cases, the commission rate reaches 30%, which is a very high rate.
He stresses that the situation is urgent and requires the intervention of the regulatory authority. The source added, “Insurance companies bear the cost of repair and compensation, while the broker only bears the cost of marketing and sales.”
He explains that it is important for the insurance sector to regulate this matter so that insurance companies do not compete on commissions to market and sell policies.
According to the Central Bank of the UAE, the number of insurance companies operating in the local market was 60, while the number of insurance brokers was 163, by the end of last year.