Brokers are nervous about inroads being made by aggregators in SME commercial lines, and few expect next year’s review of the FSCS to result in fairer fees. Our survey examines the issues affecting brokers

1. Is the move by aggregators into SME commercial lines a threat or an opportunity to brokers?
Most brokers see aggregators’ transition towards commercial lines as a cause for concern, with 57% of respondents saying the move represents a threat to brokers. Given the decimation of the personal lines market following the rise of comparison sites, these fears are understandable. Meanwhile, 26% believe the development is an opportunity, and 17% don’t know what it will mean for their business.

2. Will broker networks continue to grow and thrive during 2012?
Many brokers remain confident that networks will continue to build and retain a vital role within the industry despite a dramatic drop in network membership growth in 2010. A convincing majority, 62%, said they believe networks will grow and thrive during the next year, while 18% say that the opposite is true. A sizeable proportion, 20%, said they don’t know. As insurers continue to debate their commitment to networks, there are reasonable grounds for uncertainty.

3. Are brokers recognised enough by the public for the value they add?
A significant majority, 83% of respondents, believe brokers do not receive enough recognition for the extra value and industry expertise they can offer customers. But 14% do feel that they are noticed for the work they do, while 3% don’t know if the public appreciates the value of the services that they offer.

4. Do you expect broker consolidation to increase pace during 2012?
Despite the scarcity of capital available for acquisitions, appetite is still there and foreign private equity firms still regard UK companies as a good bet. The biggest proportion of broker respondents, 46%, expect consolidation within the broker market to pick up next year. The next biggest group, 35%, thought that a drive towards greater consolidation would not materialise, while 19% said they don’t know.

5. How confident are you that the FSA’s review of the FSCS will result in fairer fees for insurance brokers?
Next year’s FSA review of the Financial Services Compensation Scheme (FSCS) gives brokers some hope that future compensation-related levies will be charged more fairly, with the burden falling on the industry responsible for mis-selling. But few brokers are confident that the review will result in this outcome, with a large majority, 66%, of respondents saying that they are not at all confident in the review achieving fairer fees. Meanwhile, a total of 33% said they are somewhat confident that the review will result in fairer fees. Only 1% of respondents said that they are very confident in a positive outcome from the review.

6. What’s your firm’s main line of business?
Among this survey’s respondent group, 78% of brokers sell commercial lines - perhaps explaining the concerns over aggregator encroachment on their business. Personal lines brokers make up 8% of those answering the questions, while 14% said that they deal in both personal and commercial lines business.


Which insurer do you think improved most during 2011 and why?

‘Allianz, as they seem far easier to do business with’

‘Aviva: improved claims, improved new business rates, improved renewal negotiations’

‘AXA, because their risk appetite and focus upon brokers has improved’

‘LV= has made a particular effort to promote to brokers’

‘Manchester Underwriting (Amlin), although very new to the market, has provided great service in quote turnaround, issuing documents and dealing with issues that arise’

‘NIG’s service and pricing levels have significantly improved’

‘RSA: more competitive and keen to write business’

‘Sterling, owing to covers and service’

‘Zurich. Better hires and greater appetite’