This edition of the Knowledge, we asked brokers about the way they do business in personal lines

Our survey suggests that insurers are becoming choosier about the brokers they want to do business with in personal lines. Some brokers report having their agency cancelled, while others say their postcode or client base is losing favour among capacity providers.


1 What’s your main way of doing business with personal lines customers?
In results that echo the Insurance Times Broker Service Survey, telephone and email remain the predominant way of doing business. Just 1% of respondents said that they write business online, although as brokers begin to use aggregators to reach their market, this percentage could rise in the future.

2 What’s the biggest challenge facing your firm’s personal lines business?
Competing on price is the biggest challenge that brokers face, with 41% saying that price issues are their most challenging concern. Not far behind, 33% believe that direct sales by insurers are the most significant obstacle to writing personal lines business. Among the 14% who answered “other”, many respondents had a problem with aggregators, and unscrupulous brokers were criticised too: “Brokers selling policies for negative commission and relying on add-ons and referral fees for the income.”

3 How much of your personal lines business comes through an affinity partnership?
Nearly half, 49%, of respondents make no deals through an affinity partnership and are selling policies entirely by building their own customer contacts. However, a significant minority of 25% sell at least a quarter of personal lines through such schemes, accounting for a decent chunk of business. A small group, 6%, make more than half of their sales through the channel, suggesting that an affinity-led model, while relatively scarce, can be lucrative.

4 Have insurers increased their efforts in the broker market for personal lines during the past
12 months?

Opinion is split in this area. Some brokers report having been cut off by capacity providers; many also commented in this survey about the lack of a level playing field on price when competing with direct sales. The majority, 49%, of respondents believe that insurers’ efforts to support personal lines brokers have got worse since autumn 2010. However, almost as many, 41%, said things have improved, suggesting that insurers may be becoming choosier about which brokers they do business with.

5 How much personal lines business does your brokerage handle per year?
The majority, 70%, of respondents to this survey were brokers with a small to mid-size book of up to £10m in personal lines premium. These smaller, regional brokers are those most likely to be feeling the squeeze on personal lines as direct sales and aggregator sites encroach on market share.

6 Has personal lines GWP changed over the past 12 months?
Growth in personal lines GWP has eluded a large proportion, 64%, of broker respondents within the past year. “Stayed the same” was the most commonly chosen option (39%) among the Broker View voters, suggesting that the personal lines market overall is likely to be largely flat in 2011. Meanwhile “gone down” was chosen by 26%, indicating that times remain tough for a large group of personal lines brokers. However, 35% reported a rise in GWP for the past 12 months, indicating that some firms have outpaced their competitors.


Which one thing could insurers do to improve their service in the intermediated personal lines market?

‘Offer the same rates to all’

‘Level the playing field with aggregators and validate their input data more thoroughly’

‘Provide better discounts for brokers who spend the time interacting, and thereby verifying customers, to help look after insurers’ interests’

‘Stop undercutting us direct’

‘Provide the products we want and be less stringent on underwriting’

‘Allow access to the client screening system so that client information, such as claims and convictions, can be verified’

‘Communicate with the public as to why premiums are increasing. The current opinion is that insurers are making vast sums of money, as clients who have not claimed are seeing some very high increases’