UK Commercial Insurance Broker Survey H1 2008

Table of Contents

• DATAMONITOR VIEW
  • CATALYST
  • SUMMARY
• ANALYSIS
  • Direct underwriting, particularly in the commercial motor insurance market, represents a large threat to commercial brokers
    • Direct insurers and large national brokers are seen as the biggest threats to commercial brokers
    • Commercial motor insurance is seen as being most at risk from the direct channel
  • Norwich Union, Allianz and Zurich are seen as good insurance partners, while excellent claims handling is the number one driver of broker satisfaction
    • More than two third of brokers cited Norwich Union as a particularly good insurer to deal with
    • Excellent claims handling is most valued in an insurer
  • There are opportunities for some insurers to improve their service levels
    • AXA has the most scope to improve its service level to its broker partners according to survey respondents
    • Poor service is the main driver of broker dissatisfaction with their insurer partners
  • Organic growth and the targeting of new customers are the main ways brokers hope to grow. However, many have grown or intend to grow regionally through acquisitions
    • Brokers are primarily looking to grow their business organically
    • Consolidation of the intermediary channel looks set to continue
    • Regional growth is the main motivation behind planned broker acquisitions
    • Around a fifth of brokers acquired another broker in the last 18 months
  • Brokers join networks chiefly for access to a larger panel of insurers. However most remaining brokers do not intend to join one
    • One third of intermediaries belong to a broker network
    • Brokers joined a network to access a larger panel of insurers
    • Most brokers do not intend to join a broker network within the next 18 months
  • Despite consolidator interest, most brokers do not intend to close or sell their business
    • A large proportion of brokers do not intend to sell or close their business
    • Broker consolidators have contacted half of the broker market regarding possible acquisitions
    • Swinton has been the most active in its approaches to other intermediaries
  • Adherence to FSA regulation can be costly for brokers and,even though the majority of insurers offer good advice, brokers would like more assistance with documentation
    • The vast majority of firms estimate that FSA regulation is imposing costs on their annual turnover
    • Insurance partners have generally been good at helping brokers deal with FAST regulation
    • However, the majority of brokers would like more assistance with the speed of documentation
  • Awareness that the FAST is revisiting mandatory commission disclosure is high, but many brokers feel its introduction would have a negative impact
    • A large percentage of brokers are aware that the FSA is revisiting the issue of commission disclosure
    • Mandatory commission disclosure is seen as having a negative impact on brokers
• APPENDIX
  • Supplementary data
  • Methodology
  • Further reading
  • Ask the analyst
  • Datamonitor consulting
  • Datamonitor consulting
  • Disclaimer
• List of Tables
  • Table 1: What banding does your company fall into in terms of general insurance premium income turnover?
  • Table 2: What proportion of your business is commercial insurance compared to personal insurance (in terms of premium income?
  • Table 3: What level of threat do the following distribution channels pose to you?
  • Table 4: On average, by approximately what percentage have premiums changed in the last year, for the following business lines?
• List of Figures
  • Figure 1: Direct underwriting and large national brokers present the largest threat to respondents
  • Figure 2: Commercial motor insurance is most at risk from the direct channel
  • Figure 3: Norwich Union is considered to be a good insurer to deal with by a majority of brokers
  • Figure 4: Excellent claims handling is valued above all other factors
  • Figure 5: Brokers identified AXA as an insurer with the most opportunity to improve its service levels
  • Figure 6: Poor service is the main driver of broker dissatisfaction
  • Figure 7: Organic growth and targeting new customer groups are the key ways that brokers intend to grow
  • Figure 8: Most brokers do not intend to make a broker acquisiton in the next 18 months
  • Figure 9: Regional growth is the number one motivator for brokers who intend to make a purchase
  • Figure 10: One fifth of brokers have purchased a fellow broker in the last 18 months
  • Figure 11: One third of brokers belong to a broker network
  • Figure 12: Access to a large panel of insurers was the most popular reason given for joining a network
  • Figure 13: The overwhelming majority of brokers do not intend to join a network
  • Figure 14: A large proportion of brokers do not plan to sell their business
  • Figure 15: Broker consolidators have been fairly active in contacting brokers
  • Figure 16: Swinton has been the most active broker consolidator at contacting brokers
  • Figure 17: For most brokers, FSA compliance costs up to 10% of annual turnover
  • Figure 18: The majority of insurance partners have been good at helping brokers comply with the FSA
  • Figure 19: Speed and accuracy of documentation are the areas where brokers require the most assistance
  • Figure 20: Most brokers are aware that the FSA intends to look into commission disclosure
  • Figure 21: Brokers tend to feel negatively towards upfront commission disclosure
  • Figure 22: On average, by approximately what percentage have premiums changed in the last year, for the following business lines?