Willis Responds to Aon’s Announcement
That It Will Accept Contingent Commissions
Where ‘Appropriate and Legally Permissible’
NEW YORK, July 21, 2010 — Willis Group Holdings (NYSE: WSH), the global insurance broker, issued the
following statement today in immediate response to the announcement by Aon Corporation that it would resume
accepting contingent commissions “where appropriate and legally permissible”:
With Aon retreating to a troublesome and ambiguous position on contingent commissions, Willis now stands as the
world’s only insurance broker to refuse to accept contingents in its retail business. Aon’s overdue and
muted announcement, floated in mid-summer, should come as a wake-up call to all risk managers and
buyers of insurance to re-evaluate whether their broker really works for them, or the insurance carrier.
Offering opaque statements about doing what is “legally permissible,” another competitor has opted to put contingents
before principle. Willis puts clients before contingents.
What buyer of insurance would take comfort in their broker adopting a minimum standard of what’s “legally
permissible” to define their relationship? Who is really convinced that taking back door payments from carriers
at the end of a year based on profitability and growth of a book of business
is an example of, as Aon’s Steve McGill says in the company’s news release, “doing what
is right to serve the best interests of our clients”? Clients’ best interests are served when
their brokers work for them, and only them, with standards of service based on ethics and
integrity, not merely on what’s “legally permissible.”
Indeed, Aon’s announcement this week flies directly in the face of what clients want from their brokers.
In a brand new poll of commercial insurance buyers released by Business Insurance magazine on July
19, 70 percent of buyers said contingent commissions represent a conflict of interest. This is what
we have been saying all along: a retail broker cannot serve two masters. They either represent
the client or the carrier, but they can’t do both.
Willis’ stand is unwavering on the matter of contingent commissions and is clearly spelled out on www.ClientsBeforeContingents.com, our web site devoted to this issue. On the site is a full archive
of commentary about the issue and tools for risk managers to take action and demand true
transparency from their brokers. Also on the site is a White Paper, written by the respected
international law firm Edwards Angell Palmer & Dodge, on contingent compensation. The White Paper, which was
broadly quoted in news stories this week, states clearly that “A regulatory arrangement built around minimum
disclosure requirements tends to result in just that: minimum disclosure.”
The recent history of broker behavior and regulatory oversight in the insurance industry is not a proud
one. The permissive rules that have fostered rampant conflicts of interest have returned and, with them,
an industry environment that’s headed deeper into a morass and bound for more trouble when “legally
permissible” is the new standard of excellence. Our industry can do much better by its clients,
and clients should demand better from their brokers.
Willis Group Holdings plc is a leading global insurance broker. Through its subsidiaries, Willis develops and delivers
professional insurance, reinsurance, risk management, financial and human resource consulting and actuarial services to corporations, public
entities and institutions around the world. Willis has more than 400 offices in nearly 120 countries,
with a global team of approximately 17,000 employees serving clients in virtually every part of the
world. Additional information on Willis may be found at www.willis.com.
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