Pat Boreham, assistant director of MGB Insurance Brokers, talks about the decline in the number of retail brokers but how specialists are fighting back
Anyone over the age of 40 working in the insurance industry in the UK will remember the days when most insurers were based in London, in the Lloyd’s market and surrounding companies.
There were several regional insurers, but the real alternative was the London Market. A large number of ‘wholesalers’ in the City provided access to the market to thousands of retail brokers throughout the UK.
Times have changed dramatically over the last 15 to 20 years. Technology and the opening of regional offices by most insurers have allowed many more brokers direct access to their services.
And the number of retail brokers has diminished as consolidators consolidated and regulators regulated. The big ‘wholesalers’ reacted by changing their business models, often being acquired or boosting their direct marketing teams
While many of the big brokers maintain a smaller wholesale operation, even some of these are being moved away from London, where most of the insurers’ maintain underwriting operations, along with Lloyd’s itself. This has created a confusing message as brokers are increasingly finding themselves dealing with what they believe is a trusted wholesaler only to discover the direct marketing team of the wholesaler attacking their business direct.
As has been seen with the advent of out-of-town shopping centres and the effect it had on high streets across the UK, it is refreshing to see that the ‘specialists’ in providing quality goods with quality service are fighting back and winning market share again. This can be seen with specialist wholesale brokers who focus on nîche areas of insurance such as aviation, marine, professional indemnity, high risk liability, directors’ and officers’, medical malpractice and many more, providing sound advice and support to retail brokers.
Brokers are simply looking for a trusted partner to provide influence and access to Lloyd’s and London Market insurance companies.
A combination of a retail broker who has strong and lasting local business and personal connections, coupled with the support of a specialist wholesale broker with similar connections with the London Market is a powerful combination.