Big brokers that continue to accept contingency fees will face a disadvantage against those that have sworn off controversial, volume-based bonus commissions, predicted the chief executive of Marsh & McLennan, Michael G. Cherkasky.
MMC's president and CEO said the fact that its insurance brokerage arm no longer takes contingent commissions means Marsh will be forced to market its services on a value-added basis to grow its business. He predicted that clients will come to view brokers who accept contingents negatively, adding that Marsh will work to take advantage of that perception.
MMC was one of the four major insurance brokers that agreed to abandon contingent commissions after investigators charged they were used by insurers as kickbacks for broker participation in bid-rigging and steering of contracts.
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