Are the databases really for the clients, or is it just a way of brokers extracting more cash from insurers?
It was two years ago that Deutsche Bank asked to be taken off Aon’s controversial placement database, GRIP. The twin threat of nervous clients, such as Deutsche Bank, along with underwriters’ unease at having to pay for the database service looked as if they might scupper Aon’s expensive project.
Fast forward to the present, and broker databases, which track placements globally from submission to quotes and binding, are all the rage. Marsh and Willis have created their own versions, and this week JLT chief executive Dominic Burke says his company will also create a database.
Meanwhile, underwriters flock to use the services, fearful that, if they don’t sign up, they will be left behind by rivals, or simply find themselves shunned by the megabrokers. Brokers have won over sceptical insurers, and clients are dazzled by the hi-tech wizardry of it all. It’s all looking very positive.
But that doesn’t mean there aren’t questions still to be answered. As Burke asks, are the databases really for the clients, or is it just a way of brokers extracting more cash from insurers? As the soft market continues to rumble on, and investment returns remain poor for insurers, brokers will have to be absolutely sure they can continue to convince insurers that these databases are worth every penny.
- UK brokers have learnt that they could be on the hook for even bigger levies after yet more unfavourable changes from the regulators. Continuing to run a broker is tough with all the costs of regulation, and starting up a new broker is near impossible. When is the FSA going to deliver some good news for insurance brokers and show that it’s really on their side?
- It has become a cliché but, yes, the regulators must remember that the insurance industry, barring AIG, survived the financial crisis very well. There’s an argument to say the banks need much stiffer regulation, but insurance brokers need a break.