Briefing: Personal lines brokers stuggle with pricing on three fronts

Personal lines brokers are like the peppered moths - they have evolved quickly to survive their environment. 

The peppered moth used to be white, but the industrial revolution blackened trees.

This meant the white moths lost their camouflage and were gobbled up by birds. Only the mutant black version survived to become dominant species in industrial areas.

Personal lines brokers have adapted to direct selling, aggregators and regulatory change.

But even by their standards, this is a tough time as our five-star survey of them shows.

Above all, pricing is a major concern, they revealed in the survey. 

The pricing challenge is on three fronts. 

The first was from insurers offering cheaper quotes to customers. This has always been an issue, but perhaps with Covid causing more people to stay at home, there is more time to search online. 

The second is the regulator’s dual pricing crackdown. Renewals and new business must be matched. Many brokers are still reliant on insurers for their pricing. 

Thirdly, brokers complain that pricing is extremely volatile right now - and that’s not good for customer relationships. 

It’s a complicated challenge, but even more so if you are a generalist in personal lines. Specialists, such as high net worth brokers,  are much less affected by these challenges.

Perhaps this will be the continuing theme for personal lines brokers in a post-Covid world - find your niches and specialisms or risk extinction. Nobody wants to be the white peppered moth.