UK Personal Insurance Broker Survey 2007

Table of Contents

• OVERVIEW
  • Catalyst
  • Summary
• ANALYSIS
  • The mix between personal and commercial insurance varies significantly by broker
    • There are large differences in the split between commercial and personal insurance by broker
    • The majority of brokers expect no change in the proportion of their business that is personal insurance
    • Brokers feel that their business model may move towards increased selling of personal insurance
  • Despite the recent wave of consolidation in the industry, the percentage of brokers intending to follow suit is still quite low
    • Most brokers do not plan to sell their business within the next year
    • Broker acquisition rates look set to continue at the same rate
    • The percentage of those considering joining a broker network is still fairly low
  • Brokers see direct insurers and aggregators as the two biggest threats to their business
    • Direct insurers are still seen as the biggest threat to a brokers' business
    • The overwhelming majority of brokers do not currently partner with an aggregator
    • Many brokers do not currently have a website
    • Unlike other channels, brokers are yet to fully embrace the internet as a sales tool
    • Many brokers are not planning to develop a web capability
  • Brokers are generally satisfied with the level of service they receive from their insurer partners
    • Brokers display a high level of satisfaction with the service they receive from their insurer partners
    • Norwich Union and Fortis are the best insurers to deal with
    • A high level of personal service is most valued in an insurer
    • Brokers felt that AXA and Norwich Union have the most room for improvement
    • Poor service is the greatest cause of dissatisfaction amongst brokers
    • Private comprehensive insurance premium rates are estimated to have increased by 3.3% in the preceding 12 months
  • FSA regulation is proving to be quite time-consuming and costly for some brokers yet the majority view regulation positively
    • Ensuring compliance with financial regulation is still foremost in the mind of brokers
    • For a significant minority of brokers, the costs incurred to meet FSA requirements are more than 10% of their turnover
    • The majority of respondents believe that FSA regulation is having a positive impact on the industry
    • The amount of work required to satisfy FSA regulations is overwhelmingly regarded as too much
    • Insurer partners have generally been good at helping brokers comply with FSA regulations
    • The majority of brokers do not feel that they require any more support from insurer partners regarding FSA regulation
    • A large number of respondents are aware that the FSA is looking into mandatory commission disclosure
    • The general consensus towards mandatory disclosure legislation is not positive amongst brokers
    • Brokers are most likely to be reviewing their costs as a result of FSA regulation
• APPENDIX
  • Methodology
  • Further reading
  • Ask the analyst
  • Datamonitor consulting
  • Disclaimer
  • List of Tables
    • Table 1: Average premium rate movements
  • List of Figures
    • Figure 1: The mix between personal and commercial insurance varies considerably by broker
    • Figure 2: Just over a third of brokers felt the proportion of their business made up of personal insurance would change in the next year
    • Figure 3: The majority of brokers think that personal business will become more important to their book in the next 12 months
    • Figure 4: Most brokers do not intend to sell their business within the next 12 months
    • Figure 5: The majority of brokers are not considering acquiring a competitor within the next year
    • Figure 6: 7% of brokers are considering joining a network in the next 12 months
    • Figure 7: Brokers view direct insurers and aggregators as the biggest threats to their business
    • Figure 8: 2% of brokers currently partner with an aggregator
    • Figure 9: Over a third of brokers do not have a website
    • Figure 10: Online sales account for a small proportion of total sales
    • Figure 11: Most brokers currently without a website are not planning to develop a website in the future
    • Figure 12: Brokers are generally satisfied with their insurance partners
    • Figure 13: Norwich Union and Fortis were cited as the two best insurers with which to do business
    • Figure 14: Brokers want a high level of service from insurers
    • Figure 15: Over 35% of respondents cited that AXA could improve its service to brokers
    • Figure 16: Poor service is the major complaint for many brokers
    • Figure 17: FSA regulation is "top of mind" for many brokers
    • Figure 18: Complying with regulation costs most brokers up to 5% of their annual turnover
    • Figure 19: Just under half of all brokers see FSA regulation in a positive light
    • Figure 20: Over three quarters of respondents feel that there is too much work needed to comply with FSA regulation
    • Figure 21: Brokers felt that their insurance partners have been helpful in helping with FSA regulation
    • Figure 22: The majority of brokers do not require any further help from their insurer partners in regards to FSA regulation
    • Figure 23: Most brokers are aware that the FSA is reviewing the idea of mandatory commission disclosure
    • Figure 24: Brokers do not view mandatory commission disclosure positively
    • Figure 25: Most brokers have reviewed their cost base in light of the expenses associated with FSA regulation