Steve White: 'A chance to listen and engage'

One of the intriguing aspects of any research project is that you are never quite sure at the start what the results will be.

When we asked London Economics to put a value on the insurance brokers’ contribution to UK GDP, we waited with baited breath for their report. And the answer! A direct and indirect contribution of 1% - a significant contribution, a similar size to the agriculture sector (a sector that most of us believe gets far greater profile with media and politicians than we do).

So, we have established that we are an important and valuable sector. This should at least entitle us to a more appropriate and proportionate approach from the regulator.

The Future of Regulation research, conducted on our behalf by Charles Rivers Associates (CRA), set about establishing what risks insurance brokers pose and identified the potential for poor quality advice and the potential for loss of client money as the only significant risks.

It then considered the FSA’s current approach to supervision, highlighting that the FSA not only do not supervise our sector against the risks CRA has identified, they have been intrusively and disproportionately supervising our firms against risks identified in other sectors (e.g. adequate resources and banks).

The report highlighted that the FSA’s current approach to supervising our sector has lead to regulatory costs as a percentage of revenue that are disproportionately high for both the smallest and very largest firms.

Furthermore, it identified that the indirect costs of regulation in the UK were three times higher than the second most expensive EU State (Ireland). As Eric Galbraith said on the platform at Westminster: “That cannot be right, or acceptable.”

The debate now turns to how the FSA’s replacement the Financial Conduct Authority (FCA) should supervise us going forward. The report suggests a more rules-based approach and supervision narrowed to the risks CRA identified.

Whilst discussions with both HM Treasury and the FSA are ongoing, the industry will have a chance to both listen and engage at the BIBA Conference in Manchester on 11 and 12 May.

The future of regulation will no doubt be one of the main topics of conversation in the exhibition area and bars during the conference. On the morning of 12 May, a panel comprising Andy Homer, Stewart Reid, Brendan McManus and myself, hosted by Andrew Neil, will debate the issues in the main auditorium. Why not come along!