That's the post consolidation prediction of Andy Homer
Impending consolidation of brokers will see the number of networks reduce to only four, according to Folgate Partnership chief executive Andy Homer.
Speaking at the Biba Independents Day seminar in Leeds last week, Homer said that the market would eventually be composed of only three international brokers, 100 independent brokers and four networks.
He argued that FSA regulation would not be the prime driver in the market's consolidation. "The FSA is a red herring. I have not found that brokers are selling because of fear of the FSA, although compliance will be an issue."
He added that networks that managed to negotiate underwriting authorities would be more sustainable than those which simply took commission off brokers.
Other speakers said that brokers would need to adapt to the changing market dynamics if they were to survive.
Smart and Cook Group managing director Paul Meehan said that brokers should treat projections of a massive decline in their numbers with "scepticism". The key to success, he said, was to "find a niche and guard it".
Meehan said: "Brokers will need to get scale through acquisition or network membership. They will need to understand competitors and stay ahead, working together with other brokers on areas of common interest."
Alec Finch Group chairman Alec Finch said: "Personal lines brokers will need to have call centres. And in the commercial SME market, they will need to set out their stalls to deal with the fact that it is a price driven sector. The future is schemes and facilities. Technology will be vital, and being in an alliance or network will be useful.
"In the larger commercial arena, brokers will need to take on the nationals and must offer a broad range of services, such as ART and risk management."
