One half of brokers in the UK now manage schemes, according to a study commissioned by insurer MMA.
The study, which polled 250 brokers in June, also found that scheme take-up varied by region and size of broker.
Brokers in the South West and Wales are the most likely to run their own schemes. Some 61.4% of national brokers managed schemes compared with 49% of super regionals and 45% of regionals.
“Accurate market data about the volume of schemes business in the UK is scarce, so the fact that half of all brokers are now managing their own is tangible evidence of how important they’ve become for the sector,” said MMA schemes manager Chris withers in a statement. “All our figures suggest that schemes business across the market will continue to grow, and the same is true of our own book of schemes business. This is an area in which we see the potential for significant growth in the medium term.”
The survey also discovered that the main motivator for changing a scheme is commission: 48.% of brokers polled said that the prospect of better commission with another insurer would persuade them to transfer the scheme.
Poor service was the second most common reason cited for moving a scheme (42.7%) with the lack of an effective working relationship coming in third (27.4%). Factors such as the incumbent insurer’s perceived lack of knowledge of a sector, local knowledge, online services or better policy wordings had virtually no impact on brokers’ thinking.
The study also showed that the most common time period for re-tendering of schemes was every three years – as cited by 29% of respondents. Some 16.9% re-tendered annually and 13.7% every two years.
Seventy two percent of respondents stated that the current economic climate had not been a factor in encouraging more regular retendering of schemes.
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