Biba chief executive Eric Galbraith spoke to Tom Flack in a televised interview on insurancetimes.co.uk.
How much has the market changed in the past year?
I’ve been with Biba for four years, and I believe the industry has changed immensely in that time. We’ve had regulation from the FSA, we’ve had a huge amount of consolidation and we’ve had a major focus on distribution. That is what we’re in – a distribution war – that’s come about in our sector. There’s a huge challenge about what we do, and how we do it. One of the areas we need to focus on, and represent for our members, is ensuring that the profession of the broker is promoted correctly and obtains a level playing field in the sector.
What would you say is the key issue on the regulatory agenda at the moment?
If I was to identify one issue, it is the ongoing challenge we have with regard to the FSA’s forthcoming discussion document [on commission disclosure and conflicts of interest]. One message I would have for the members is now is the time to engage with it. We’ve been talking about this for two years, around conflict management and disclosure. I want everyone to write to the FSA.
The problem of insurers poaching brokers’ clients has been in the spotlight recently. Do you think it will persist?
This is part of the distribution challenge we face. Some of the issues we have seen are an utter disgrace. I just don’t understand. [It is] dealing with what is fair and what is right – whether it’s legal or not is another issue. We, the professional broking sector, have to be very aware of how we engage with insurers with our terms of business, and our terms of engagement with our customers. Unfortunately, in many ways, it’s not down to good faith any more – it’s down to what’s in the contract.
Is this a concern for some of Biba’s smaller members in particular?
I think you’re right. We have definitely got to be in there helping those members and actually taking up the issues on their behalf with underwriters, insurers and other participants [in their business]. I think it’s difficult sometimes for them to do that because they might feel they will be more adversely affected by those suppliers if they speak out, so it’s much better for the trade body to do so.
Biba seems to have a lot on its plate. Do you sometimes feel it is an insurmountable amount of work?
I don’t think it’s an insurmountable amount of work. There are some areas that definitely frustrate me, for example, regulation. The debate around disclosure has been going on for two years. We put we what we believe is a market solution to the FSA. It carried out a cost-benefit analysis, that’s failed, and yet we’re still talking about it.
“Some of the issues we have seen are an utter disgrace. I just do not understand. [It is] dealing with what is fair and what is right, whether it is legal or not is another issue.
Do you feel that we’re no further down the line in terms of resolving the issue?
I believe we are. I think we’ve got a market solution, if our members do the three things we’ve been talking about – around conflict management, about their terms of business arrangements, and being able to answer the question about disclosure – that will resolve the issue, and we don’t need further regulatory intervention or changes to the rules.
Do you envisage aggregators being among the most touchy subjects for your members this year?
I wouldn’t say it will be one of the most touchy subjects; it’s one of a variety of issues that Biba is engaged with. Aggregator sites are marketing companies, and we believe that the technology is here to stay, and I believe that our sector can take advantage of it. But at the moment there are things that are happening in that sector that create an imbalance with regulation and are detrimental to the consumer as well, and we have to take action on that.
Do you think there will be a hiatus in consolidation as a result of recent changes to capital gains tax?
My understanding is that it has not created a hiatus. We are seeing, and probably will see, more deals coming through with regard to the tax position. As to whether that will continue, we’ll just have to wait and see.
Are you concerned, therefore, that your membership will get smaller as a result?
There are quite a lot of people in our sector that are not a member of any trade body. We’ve already added nearly 70 members this year, and we added 214 last year. So we’ve got the opportunity to grow our membership. It is affected by consolidation when companies come together, but I’m not concerned. It is a dynamic enough market to take care of itself. I would be concerned if we see a period where we don’t get any new firms setting up.
Moving on to the conference itself, what would you say is the purpose of the event, and how has it changed in the past 30 years?
The Biba conference is recognised as the networking event of the general insurance sector. If you look back, the conference has changed from a conference to a conference and an exhibition. That formula has changed over the years and, this being the 30th year, we have the opportunity to look back as well as forward. Perhaps it could take in more of a European or global flavour. We have huge influences from China, India and Europe as well as the existing American market that affects our Lloyd’s members in particular.
“We need to be right in there at the coal face influencing what is going on. That is really important.
Does this mean you could look to hold the conference abroad?
My understanding is [in the past] there was a conference held in Paris. After each conference there is always a debate around whether or not we should take it overseas. I think that would be interesting. I’m not sure whether you would take the whole conference as it stands across, but there’s no reason why we shouldn’t consider doing something in another area.
The influence that’s coming out of Europe, and the potential for the wrong issue to move in the wrong direction, is considerable. We need to be right in there at the coal face influencing what is going on. That is really important, and is highlighted by going to these areas and participating in these events.
Is it not difficult to take your agenda global when many of your members are local?
A lot of our members have a huge range of skills. Many are operating in the international and global arena; I would like to see more of them do that. I definitely want to see our skill sets expand around the world. I have invited a number of members of BIPAR coming to along the conference this year. They want to see what we do, because in many cases we are a few stages ahead of them in terms of developments in regulation happening throughout Europe.
What does the conference offer other than networking? Can it help brokers make strategic decisions about the future of their businesses?
I would hope those who attend [Biba] would come away with a much clearer picture of what is happening in the industry, and [as a result] will engage with the industry. That is a huge advantage just to see. Running a brokerage, you are so focused on maintaining your position and servicing your clients, it is necessary to take time out to look at wider issues in the sector: about how to attract the right people, have the right reputation, to make sure people understand the benefits of having a broker, of having professional advice, and access to people who can help you. We touch every part of business and the individual.
Which one of the speakers at this year’s conference excites you the most?
They are all fantastic. We have changed it this year, a high powered panel will speak as well. The plenary speakers are chosen to talk about world issues and events, and take a different view; that allows members to listen to other people in industry. Clearly, Bob Geldof on Friday will be a highlight, and I’m looking forward to that as well.
Are you concerned that [Geldof] will have an entirely unsympathetic view of the industry?
That’s all part of the challenge we have. We’re always going to see MPs and other stakeholders, and we always have to demonstrate the value of our sector, and the value of using a broker. I relish the challenge when someone gives a perceived view about what we do or don’t do, and think it is really useful to have that opportunity.