Mergers will lead to unfair competition, IIB survey shows
Over 20% of broker firms may be sold or merged during the next three years, according to a recent IIB survey.
The survey, conducted among IIB members, also highlights that 72% of independent broking firms think insurers buying into the profession will lead to unfair competition.
Commenting on the results, IIB director general Andrew Paddick said: “The majority of independent broking firms are very worried about insurers buying their rivals, because they fear preferential rating which would lead to the loss of accounts they have held and serviced well for many years.
"While there is no hard evidence of such practices at present, it may be early days, so we will just have to wait and see.
"Should preferential rating become a problem, then we will have to consider an appropriate commercial response.
"I do not believe some insurer claims that they are just buying brokerages solely as an investment, I think it is far more tactical – to secure influence over the movement/retention of large blocks of business.
"There is no doubt that consolidation within the sector will continue apace, especially with so many broking principals/directors nearing retirement age over the next few years, which will have membership number implications for associations like ours."