A damning new survey has underlined press reports of a rapid decline in insurers' service standards and reports that brokers believe the situation will get worse.

The level of dissatisfaction is highest among commercial lines brokers, 85% of whom say they have seen a decline in service standards among household name insurers.

This compares to 68% of personal lines brokers. However, the independent survey published by Insurance Research & Strategy, said the level of dissatisfaction is growing as 70% of brokers believe service standards will continue to fall. The survey highlights wide variations in service standards among the big insurers.

Larger-sized brokers can expect a better service from insurers overall. But geographically, it is brokers in the north who have suffered most, with an average of 82% complaining about the service they receive.

This situation is reversed in personal lines, where only 44% of northern brokers are critical of insurers' service.

Another intriguing finding is that brokers connected to the internet fare better in terms of service levels, with 63% of commercial lines and 47% of personal lines brokers experiencing poor service.

Interestingly, the decline in larger insurers' quality of service appears to be consistent across all areas of their business, including, quotations, policy issue, claims and accounts, say brokers.

A majority of brokers blame mergers in the industry for the worrying decline in the service they receive from insurers. They also view mergers as the largest threat to their own businesses' development.

More than 60% of small to medium-sized brokers expressed concern at the prospect of further agency culling by insurers. Similar unease was mentioned by 50% of larger brokers. This level jumps to 70% of composite brokers.

The survey report says increased broker expectations cannot be blamed for the rise in dissatisfaction because they have remained constant over the past three years.

In addition to misgivings about mergers, 40% of personal lines brokers are worried about competition from direct writers, though this is less of a concern for small brokers, (28%) and net-connected brokers, (30%). In response to these perceived threats, brokers are reported to be considering mergers or acquisitions to protect their position in the market.

An average of 33% of brokers are actively seeking to grow by merger or acquisition, a figure that rises to 40% for net-connected and commercial lines brokers, 46% for northern brokers and 51% for larger brokers.

A larger proportion of brokers (42%) are attempting to expand their business by developing new markets, more so in the case of net-connected brokers (50%), larger brokers (57%) and commercial brokers (60%).

A smaller amount of brokers (14%) are looking to exit the market, the survey reports. But this figure rises to 24% for smaller brokers, 31% for personal lines brokers and 34% for brokers not connected to the net.

Although an average of 70% of brokers are connected to the internet, only 48% of personal lines brokers have access, compared to 74% for commercial lines and 86% for composite brokers. However, the survey reveals the internet is mostly used to send emails, (53%) and not so much for obtaining quotes, (14%).