DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
ANALYSIS 2
Many brokers perceive national brokers as a significant threat to their business, while commercial motor products are at greatest risk of being absorbed by the direct channel 2
National brokers represent the greatest threat to commercial brokers in the second half of 2007 2
Commercial motor insurance products are at greater risk of being lost to the direct channel than commercial property or liability products 3
A number of insurers have an opportunity to improve their service levels among their broker partners 4
Poor service was the most popular reason for brokers' dissatisfaction with their insurer partners 5
Norwich Union is perceived as a good insurer to deal with by many brokers 5
More than half of survey respondents felt that Norwich Union was a particularly good insurer to deal with 5
A high level of service from insurers is considered to be important among brokers 6
Organic growth remains a key strategy for brokers, although broker acquisitions remain popular 7
Brokers are keen to pursue organic growth 7
More than one fifth of the brokers surveyed have acquired a fellow broker 8
More than a third of brokers surveyed are considering planning an acquisition in the next 12 to 18 months 9
Increasing premium turnover and regional growth are the key motivations for planning a broker acquisition 10
The broker network model remains popular as many brokers wish to gain access to a larger panel of insurers 11
Over a third of brokers are part of a broker network 11
Many brokers joined a broker network to gain access to a larger panel of insurers 12
The proportion of brokers considering joining a broker network has decreased since the H1 2007 survey 13
Mandatory commission disclosure may be costly to some brokers 15
The majority of survey respondents believed that FSA compliance costs were no more than 5% of their annual turnover 15
The majority of brokers are satisfied with the level of assistance their insurance partners have given them in relation to FSA compliance 16
However, brokers feel that there is scope for improvement in certain areas 16
The majority of brokers are aware that the FSA is revisiting the issue of mandatory commission disclosure 17
The majority of brokers believe that mandatory commission disclosure would have a negative impact on their business 18
APPENDIX 20
Supplementary data 20
Methodology 23
Further reading 24
Ask the analyst 24
Datamonitor consulting 24
Datamonitor consulting 24
Disclaimer 25
List of Tables
Table 1: Q: "What proportion of your business is commercial insurance compared to personal insurance (in terms of premium income)?" 20
Table 2: Q: "What proportion of your business is commercial insurance compared to personal insurance (in terms of premium income)?" 21
Table 3: Q: "What level of threat do the following distribution channels pose to you?" 21
Table 4: Q: "On average, by approximately what percentage have premiums changed in the last year?" 23
List of Figures
Figure 1: National brokers remain the largest threat to the majority of survey respondents 2
Figure 2: Commercial motor is the line of business most at risk to the direct channel 3
Figure 3: A number of insurers have scope to improve their image among brokers 4
Figure 4: Poor service was the most common reason for brokers' dissatisfaction with their insurer partners 5
Figure 5: Norwich Union is an insurer that many brokers like to deal with 6
Figure 6: A high level of personal service is important to many brokers 7
Figure 7: Organic growth remains a key growth strategy for the majority of brokers 8
Figure 8: Just over a fifth of brokers had acquired a fellow broker in the previous 12-18 months 9
Figure 9: Over 13% of survey respondents are planning an acquisition in the following 12-18 months 10
Figure 10: The majority of brokers are planning an acquisition in order to increase their premium turnover or achieve regional growth 11
Figure 11: More than one third of brokers surveyed belong to a network 12
Figure 12: Access to a larger panel of insurers was the most common reason given for joining a broker network 13
Figure 13: The vast majority of survey respondents have no plans to join a broker network in the next 12-18 months 14
Figure 14: More than two fifths of survey respondents believe that costs arising form FSA compliance have been no more than 5% of annual turnover 15
Figure 15: More than half of brokers surveyed believe that their insurer partners helped them meet FSA requirements in the second half of 2007 16
Figure 16: The majority of brokers felt that accuracy of documentation was an area their insurer partners could improve on when helping them meet FSA requirements 17
Figure 17: The majority of brokers surveyed are aware of the FSA's work on commission disclosure 18
Figure 18: More than half of brokers surveyed believe that mandatory commission disclosure would have a negative impact on their business 19
Figure 19: The majority of respondents felt there had been no change in premium rates for all insurance lines 22