UK Commercial Insurance Broker Survey 2010

UK Commercial Insurance Broker Survey 2010 published by Datamonitor in January, 2010. This report consists of 24 pages and the price starts from US $ 1695.

Introduction

Abstract

Introduction

This brief analyses the opportunities and threats faced by commercial insurance brokers. It covers a number of areas including the strategies brokers intend to use to grow their business, their perception of the main insurance companies, their appetite for making acquisitions or being acquired and their view on the threat from alternative distribution channels.

Scope of this research

• Data on the prevalence of the broker network model and the factors which are driving the model such as gaining access to a large panel of insurers.
• Insight into the insurance companies that brokers prefer to work with and the reasons why these insurers are meeting brokers' needs.
• Information on acquisition activity including brokers' future intentions to purchase and the reasons why.

Research and analysis highlights

A significant proportion of respondents (61.7%) believe that the direct channel poses the greatest risk to small commercial vehicle insurance (an insurance product for commercial vehicles that weigh less than three tons).

In the survey, brokers perceived a number of insurers positively. Of these, Allianz and Zurich stood out as particularly good insurers to deal with, with 65.0% and 62.0% of respondents, respectively, naming these insurers.

Key reasons to purchase this research

• Gain insight into the prevalence of the broker network model, the factors driving the model and the model' s future potential.
• Understand the future level of consolidation in the sector and the companies which are most likely to drive this consolidation.
• Benchmark your broker service levels against those of your competitors and understand the most important broker needs.

Table of Contents

DATAMONITOR VIEW

• CATALYST
• SUMMARY

ANALYSIS

• Large national brokers pose the biggest threat to brokers, while the direct channel is believed to pose the greatest risk to small commercial vehicle insurance
  • Large national brokers represent the largest threat to respondents
  • Respondents believe that the direct channel poses the greatest risk to small commercial vehicle insurance
  • Brokers cited small commercial vehicle insurance products as most susceptible to increases in premium rates during the last year

• Allianz and Zurich are considered to be good insurers to deal with, while the quality of products is a key driver behind broker satisfaction
  • The majority of brokers think that Allianz and Zurich are good to work with
  • Brokers value ‘quality of products' and ‘rapid query response' the most
  • Brokers identified AXA and RSA as insurers that most need to improve their service levels
  • Poor service from insurers remains a key concern among UK commercial brokers

• The majority of respondents are seeking to grow their business, although consolidation activity is likely to remain static
  • The majority of respondents are seeking to grow their business through targeting new customer groups or growing organically
  • Consolidation between brokers is expected to continue to cool down in the next 18 months
  • Growing premium income remains a key driver behind consolidation activity
  • Almost half of the respondents have been approached by a broker consolidator over the last 18 months
  • Of the respondents that had been approached by a consolidator, 29.0% stated that they had been approached by Swinton

• Many commercial brokers are already part of a broker network or club which allows them to gain access to a large panel of insurers
  • Many commercial brokers have already joined a broker network or club
  • Most brokers joined a network in order to access to a large panel of insurers and to increase their bargaining position
  • The majority of brokers that are not already in a broker network do not intend to join one

• A significant proportion of brokers wish to receive more assistance from their insurer partners in meeting FSA regulation, which costs most brokers up to 10% of their turnover
  • Compliance with FSA regulation costs most brokers up to 10% of their turnover
  • The majority of brokers remain satisfied with their insurer partners and the level of help they receive to meet FSA regulation
  • Accuracy of documentation is an area with which insurers could offer more assistance to their broker partners

APPENDIX

• Supplementary data
• Methodology
• Further reading
• Ask the analyst
• Datamonitor consulting
• Disclaimer

TABLES

• Table: What level of threat do the following distribution channels pose to you? (%)
• Table: On average, by approximately what percentage have premiums changed in the last year, for the following business lines? (%)
• Table: What banding does your company fall into in terms of general insurance premium income turnover?
• Table: What proportion of your business is commercial insurance compared to personal insurance (in terms of premium income)?

FIGURES

• Figure: Large national brokers and small regional brokers represent the largest threat to brokers
• Figure: The direct channel is believed to be the greatest risk to small commercial vehicle insurance
• Figure: Brokers cited small commercial vehicle insurance as most susceptible to premium rate increases over the last year
• Figure: Allianz and Zurich were cited as the two best insurers to deal with
• Figure: Good product quality and rapid query response are valued the most by respondents
• Figure: AXA and RSA were cited as the two insurers with the most opportunity to improve their service level to brokers
• Figure: Poor service and inflexibility were the major reasons behind brokers' dissatisfaction with their insurer partners
• Figure: The majority of respondents are seeking to grow their business through targeting new customer groups or growing organically
• Figure: Only 4.3% of respondents are planning to acquire a fellow broker over the next 18 months
• Figure: Achieving growth in premium income remains a significant factor behind a broker' s decision to acquire a fellow broker
• Figure: Almost half of the respondents have been approached by a broker consolidator over the last 18 months
• Figure: A significant proportion of brokers stated that they have been contacted by Swinton
• Figure: 45.7% of respondents are already part of a broker network or club
• Figure: Access to a large panel of insurers and better commission rates were the most popular reasons for joining a broker network or club
• Figure: The majority of brokers are not willing to join a network in the next 18 months
• Figure: Complying with FSA regulation cost 17% of brokers more than 10% of their annual turnover
• Figure: Almost two-thirds of brokers found insurers helpful in supporting them to comply with FSA regulation
• Figure: Accuracy of documentation, training and speed of documentation are key areas in which insurers can offer broker partners improved assistance to comply with FSA regulation

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