Against a transparent backdrop fashioned as a giant web page, Willis drew the RIMS 2010 Boston press corps to its booth shortly after the Exhibition Floor opened.
The reason? For Don Baily, CEO, Willis North America, and Joe Plumeri, Chairman and CEO of Willis Group, to reiterate their staunch opposition to contingent commissions. But more importantly, they were launching ClientsBeforeContingents.com, a new website dedicated to hosting a 24/7 global conversation about contingencies.
Bailey noted that contingencies amounted to having a “second master” which led to inherent conflicts of interest. But Plumeri put an even finer point on the topic when he attacked the notion that contingencies needed only transparent disclosure to avoid a conflict of interest. “Just because you’re transparent,” Plumeri said,” does that mean it’s okay for you to do these things?”
Plumeri and Bailey’s position on contingencies has not changed in the five years since this became a hot button issue for risk managers and their insurance industry counterparts. but what today’s announcement does is show that Willis is no longer willing to comment on the issue only when it arises in the media.it intends to make this a nonstop topic of conversation to anybody who is willing to listen. And if Willis has its way, there will be plenty more people listening and thinking about this in the near future.
For RIMS, which also opposes contingencies, Willis’ new websites adds a welcome resource to the body of literature and communication on this issue.
And as Plumeri has shown, he and Willis is not going to let this topic go away any time soon.
“You have to have principles,” Plumeri said. “And in this particular case, these prinicples are not negotiable.
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Plumeri noted that Willis does charge higher standard commissions to make up for revenue it loses were it to accept contingencies. He went on to say that certain structural problems that lead to possible conflicts of interest — such as the reality that any one insurance company client is likely to be more valued to a broker than any one end consumer of insurance — Plumeri said that so long as the insurance intermediary does its business in a fully transparent way and always does what is in its client’s best interests, those structural problems tend to settle themselves.
Plumeri himself noted that ClientsBeforeContingents.com was unlikely to overturn the New York insurance office’s recent overturning of a ban on contingent fees. Nor was it likely to spur other states to outlaw the practice.
But what he did hope it would do is cut through a widespread public apathy on the topic, fueled by ignorance on how contingences are structured, how they came into being, and what they really mean to the insurance buyer. By providing third party whitepapers, an opportunity for the public to comment, and frequent content updates from Willis itself, Willis is banking on crowdsourcing public opinion on a matter that has failed to find a convincing legislative or regulatory remedy.
“We have a responsibility to do it honestly, fairly and transparently,” Plumeri said of insurance broking. “Because without community there is no insurance, and without insurance there is no community, and I think we have a responsibility to do the right thing.”
