Sesame's decision to stop paying renewal commission on general insurance products to former members could lead to churning, says a rival network.
Whitechurch Network managing director Ian McIver believes Sesame's move could push former members to rebroke policies to replace lost income.
A letter sent to all former Sesame members states that from January 15, the network will stop paying commission on general insurance business to former members still in the industry who have not placed any business with Sesame General Insurance Services – formerly DBS Assurance Services – in the last six months.
Sesame says the move is to help pay for general insurance regulation and if former members wish to protect their renewal, they will have to start using SGIS again.
Retired members receiving less than £50 a month in GI renewal will also no longer be paid. Sesame says it cannot justify the transaction costs associated with such small payments once regulation starts.
McIver says: “Sesame are saying they will pay renewal if you work through them. Advisers may think: 'I will rebroke it with another company.'” Sesame head of support Sue Lewis says: “It would be entirely up to the adviser if they decided to rebroke the policy. They would have to go and look at a cheaper policy and justify that with their client.”