Former JLT chief executive Steve McGill warned brokers that they risk extinction if they do not evolve.

Speaking at the Insurance Institute of London, McGill said brokers must embrace technology, transparency and technical excellence if they are to survive.

He criticised the failure of brokers to make profits, saying that JLT did a review of brokers last year and found "a large proportion" made no trading profit and made profit only on investment income.

"That is flawed and will not continue," he said.

He added the damage to the industry's reputation caused by New York attorney general Eliot Spitzer's inquiry and the need for change must "not be underestimated".

Smaller brokers, he said, would have to "work harder" to differentiate themselves from the larger companies. "Small start-ups will no longer be a feasible option."

He urged brokers to exploit the opportunities in Eastern Europe and China as they held "long-term" opportunities. "The growth in China will be phenomenal."