Product designed for brokers with delegated authority and MGAs.

City Insurance Brokers and Compass Underwriting have teamed up on Profit Commission Coverholder Protection (PCCP).

According to the partners it is believed to be one of the first catastrophe profit protection schemes ever launched.

The cover, backed by A-rated carriers, is aimed at brokers with delegated binding authorities and managing general agents (MGAs).

The pair detailed that the scheme insures coverholders’ profit commissions against being reduced by a single large loss, up to a selected limit of indemnity.

Large loss
Andrew Briant, Compass Underwriting’s managing director said: “In simple terms, PCCP can remove a single large loss from the profit commission calculation.

“It is similar in concept to insurers purchasing catastrophe reinsurance.”

David Goodley, the CEO of City Insurance Brokers added: “Having worked as a compliance consultant for numerous small MGAs, I have seen both the benefit and extreme difficulties that profit commissions bring.

“The benefits from years of careful underwriting can be wiped out in an instant by a single large loss. PCCP enables those distributing or underwriting to remove this potential and secures the ongoing benefits of their disciplined and careful underwriting.”

For all the latest industry news direct to your inbox, sign up for our daily newsletter.