Lumley General Insurance CEO David Matcham thinks brokers aren’t as independent as they used to be, with many relying on “agent-like” agreements with insurers to do business.

Speaking candidly at the National Insurance Brokers Association (NIBA) Convention, he told delegates the whole landscape is changing when it comes to the way insurers and brokers do business.

“The dynamics are changing… and I think brokers are becoming tied agents of insurers,” he said. “They’re no longer giving advice, they’re no longer broking the business; it’s just going down a channel.”

Mr Matcham believes insurers have a choice in how they respond to this new way of doing business.

“For insurers you have either got to build a strategic alliance with a broker and be part of his panel, or you retreat out of that market, or you compete with it and you start up a direct line, which is also what’s happening.”

But NIBA CEO Noel Pettersen disagrees. He told Sunrise Exchange News brokers have “always been the preferred distributor of commercial insurance… and that isn’t going to change”.

“With the growing complexity of risks, the role of the broker and the specialised advice they provide has never been so important,” he said. “We know claims handled through brokers are settled faster and more efficiently, and there’s a reason for that.”

Mr Matcham was also sceptical of the new Insurance Brokers Code of Practice, which was launched at the Convention by Parliamentary Secretary to the Treasurer Chris Pearce.

“It’s actually quite interesting to see the brokers code… because it doesn’t have the same prescriptive service standards that we [insurers] have in our code.

“I just have this thing in the back of my head, that if we’re providing the information to brokers to provide to the clients, they might not be fulfilling the same standards that we have in the insurance company code.”

But Mr Pettersen disagreed with Mr Matcham’s comments about the code, saying they “appear to be his own personal views and not reflective of the industry as a whole”.

“NIBA has spent years consulting with regulators and the consumer movement to ensure all the necessary requirements have been met,” he said. “Parliamentary Secretary to the Treasurer Chris Pearce openly endorses the code, and it has received overwhelmingly positive support so far.”