Norwich Union's Phil Hitchcox highlights the industry's forthcoming challenges, in the light of the regulatory changes of the past year

Phil Hitchcox, intermediary business director at Norwich Union, said brokers face a challenging market and need to particularly focus on compliance.

"Regulation and compliance is something that we are heavily involved in within Norwich Union. But I know from talking to the broker community that exactly the same challenges exist there, if not more so for many of them," he said.

Another topic troubling him at the moment is the motor insurers database. "Another piece of EU legislation that has hit us. We've a target of a 95% return rate to the MID by the end of this month, and we are a smidgen off that. It is very tough."

Contract certainty is another factor. "A lot of industry analysts are getting involved in this, and we have people on working parties within the ABI. It will be the next big thing to challenge us.

"Also, the pressure on existing remuneration models is something that started to surface with Spitzer, particularly with the market under pressure, as it is at the moment, on premium. I'm sure all of you are finding that as the premiums contract slightly so do your margins. The amount of commissions you can earn will shrink too."

And Hitchcox raised the question over transparency of those commissions. "I've met very few brokers who aren't prepared to sign up to a deal, so some have been a little concerned about the prospect of the FSA coming down strongly on them. There is a get-out clause in that for every deal made, both parties can back out if the regulator finds a problem. But remuneration models are really under scrutiny."

Consolidation and acquisition within the broker market is also an issue that concerns Hitchcox.

"The emergence of more and more super-regionals is a feature that we're seeing, with broker acquisitions where the business stays in its original location, but the acquiring broker becomes much bigger and more influential with us.

"We're also in the major grip of what is now turning into a soft market. Our job as insurers is to try to manage that market and give consistent returns. And the insurance cycle, particularly on fleet, has been something that's challenging us for a little while."