Risk managers at companies large and small continue to move away from commission-based brokers for their insurance needs, with about two-thirds of 1,500 companies surveyed opting for brokers who operate on a set fee basis, a new study reports. Those companies making the switch, however, are often not taking advantage of the many extra services available from those fee-based brokers.

The study, conducted jointly by the Risk and Insurance Management Society (RIMS) and by Advisen Ltd., a New York and London-based risk advisory firm, found that the average commission for corporate insurance in 2007 was 10.5% of premiums, while the typical flat fee was running at about 8.8% of premiums.

"There is clearly a cost advantage in moving to a fee-based broker," says David Bradford, editor in chief of Advisen, "though with premiums coming down, that relative advantage could diminish." Bradford also notes that companies could get more services from the broker for their fixed fee than many were bothering to ask for.

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