Brokers have reacted angrily to a plan by Vero to cut commissions on personal insurance home cover from 22.5% to 15%.

The insurer says the 7.5% cut, which comes into effect on February 1, will help tackle “increasing events-related cost pressures on home premium levels that the whole industry is facing”.

But Steadfast MD Robert Kelly says the action is “extremely disappointing”, especially as Vero’s recent move to give brokers authority to accept claims of up to $7000 for clients affected by storms has been received so positively.

It’s understood Steadfast was only made aware of the Vero decision late on Thursday, following a series of “town hall” meetings around Australia.

Mr Kelly told insuranceNEWS.com.au he understands Vero has made the decision to “continue its ability to offer an intermediated personal lines product”.

But while householders’ business is a small percentage of Steadfast brokers’ portfolio, “if Vero has no intention of changing its mind there is a risk the portfolio could go to another insurer”.

“I can confirm that two competitors of Vero which pay full commissions have already indicated to me they do not intend to change their arrangements.”

Last year QBE cut its personal lines broker commission rate from 22.5% to 20%.

Suncorp says the action “is an important step in ensuring the Vero home portfolio remains sustainable in the long term and for brokers to continue to offer their customers Vero home cover for the foreseeable future”.

A spokesman told insuranceNEWS.com.au there are no plans to cut commissions on other products.

“We hope brokers understand the reasons for this,” he told insuranceNEWS.com.au. “We want to be able to continue to offer this product and make it viable.”

Austbrokers CEO Mark Searles told insuranceNEWS.com.au the group is “considering our position” on the issue.