Local expertise is being acknowledged in the regions despite the thrust of the multinationals, says Steve Fitzgerald.
Regional markets each have their own proud heritage with each centre making its own significant contribution to the common wealth of insurance knowledge - fire & perils for warehouses in Manchester and employers' liability for the engineering industries in Birmingham for example.
It is interesting to note that the first chartered insurance institute was founded in 1873 in Manchester, with Glasgow, Norwich, Birmingham and Leeds among those formed ahead of London.
Broking expertise also developed in parallel. When you supplement the presence of large multinationals with the super-provincials such as Smart & Cook and independents such as Hendersons, it is evident that these local markets present a rich technical resource.
What is regional business?
Regional business is a risk of any size where technical need and ability are matched locally. 'Local' means the market or region in which the broker who controls the relationship with the client is situated.
The client can be headquartered anywhere in the UK. Regional business is not capable of being defined by a premium level or an exposure limit and will vary from SME to large corporate.
What do regional brokers want from a regional insurer?
DA Constable Syndicate, part of the QBE Group, is long established in the regions. In our experience brokers are looking for the following qualities:
- Flexible access - not just a 9 to 5 operation
- Access to expertise with efficient and prompt solutions
- An insurer with the appetite and ability to see things differently
- An insurer that can add value to the insurance contract either by way of risk management advice or face-to-face interaction with the policyholder
- Prompt and accurate policy issue
- An effective claims service with shared management information
- A quality security rating.
In practical terms, this means instant access to decision makers who can keep good their promises.
In most respects what brokers want from insurers does not differ from region to region.
The 2006 Datamonitor Survey identified what brokers value most from an insurer. Rapid query response and personal service came top of the list.
What do regional insurers want from regional brokers?
Regional brokers are keen to support their local markets but insurers are sometimes frustrated by multinationals forcing distribution to London.
Insurers would like to see more autonomy for regional staff of these brokers.
Another area of concern is the danger that the use of e-commerce brings with it a carpet bombing approach to placement which prevents insurers differentiating themselves by dialogue.
Finally, I think those insurers who have distinguished themselves by delivering a top class service should ask brokers to stop supporting those who fail to do so.
All our major cities have benefited from significant investment from the private sector and reinvented themselves.
Services have largely replaced manufacturing industries and those that remain have had to modernise to keep pace with global competition.
The construction and infrastructure sectors are doing well and play a vital role in the UK economy, contributing around £74bn.
The annual value of civil engineering works is in the region of £20bn.
The feeling is definitely upbeat.
There is much to play for in regional marketplaces. Rapidly growing mid-sized brokers are challenging the multinationals, forcing them to look further down the value chain and eye SME business for revenue.
Compliance has created a drive to cut frictional costs. Shortening the communication chain and plugging into local expertise is an obvious solution that will benefit regional development.
A bright future for the regions is evidenced by the number of start-ups and expansion of underwriting facilities in the past four years.
Players are no longer content to let business find its way to London and see the regional connection as a vital part of their strategy.
The value of commercial general business in the UK is estimated at £22bn. There will be big opportunities in regional markets. To win, insurers will need to differentiate themselves by the ability to see things differently while delivering access to excellence. IT
- Steve Fitzgerald is a director at DA Constable Syndicate 386.