Broker schemes data reveals lines with ‘consistent growth in earning value’

The overall premiums earned by broker schemes increased 18% period-on-period, according to the latest Insurance Times Schemes Index, which covers the period between 1 July and 1 December 2024. 

The Insurance Times Schemes Index is based on data from broker schemes software provider SchemeServe, collected from its platform.

The previous instalment of the Insurance Times Schemes Index, published in September 2024, indicated a “slightly improved trading period” and a partial recovery in the premiums earned by brokers. 

This most recent iteration of the index shows a continuation in this trend of recovery, with 21 of the 27 measured lines showing percentage increases in the commission earned for brokers. 

Adam Bishop, SchemeServe chief executive, noted that of the 27 lines analysed by the firm, 18 also saw first premium commission increases when compared to the previous six-month period, while an additional 18 lines saw renewal premium commission increases. 

He added that premium value percentage rises were largely in line with increases in commission earned over this period of analysis, which he said was “establishing something of a trend”. 

Last September, Bishop told Insurance Times that the rate of increase in commissions earned had outstripped the rate of increase in premiums, so a return to largely equivalent increases “should be expected”. 

Top performing schemes 

Comparing the second half of 2024 to the same period in 2023, the schemes that saw the largest increases in commission percentage were commercial combined, motor trade and commercial property owners. 

The commission brokers earned from commercial combined lines increased 33% year-on-year, equivalent to an uplift of £1.24m.

Motor trade schemes, meanwhile, saw a 27% rise in commission on SchemeServe’s platform, which equalled a £129,853 total uplift.

Commercial property owners’ schemes recorded a year-on-year commission increase of 26%. In this line, however, actual premiums earned only increased by 6% over the same time frame, indicating a faster rate of increase in commissions not tied to premium increases. 

This was not the case in commercial combined or motor trade schemes, where premium increases were closer to the rate of increase in commissions earned – at 30% and 16% respectively.

In the previous Insurance Times Schemes Index from September 2024, the top three commission generating schemes included commercial combined and commercial property owners’ schemes, but motor trade was edged out by an impressive rise in commission from SME package schemes. 

In this iteration of the index, SME package schemes still saw an appreciable year-on-year commission increase of 11%, placing it in sixth spot below the top three, excess of loss liability and combined liability schemes. 

Bishop added that while percentage increases in commission value for SME package schemes was slower than some other lines, this type of scheme actually saw one of the largest increases in total commission value. Brokers operating on SchemeServe’s platform earned an additional £766,349 when compared to the same period in 2023.

When looking at the last six months of 2024 in comparison to the first half of the same year, a different set of business lines occupied the top three podium spots for broker commission earned. 

Period-on-period, the largest earner of broker commission was pubs and clubs schemes, which saw a 44% increase – equivalent to £521,187. 

Pubs and clubs schemes were followed by household schemes, which saw a commission increase of 43% between H1 and H2 2024, and caravan and trailer schemes, which recorded an increase of 39%.

Across both year-on-year and period-on-period comparisons, Bishop noted that commercial combined, SME package and commercial property owners’ schemes had shown ”consistent growth in earning value and a reliable growth in income” for brokers. 

He added: “On the platform, the overall premium increase across all schemes averaged over 18% period-on-period, which represents growth well above general inflationary indexes.” 

Cyber in the red

Commissions earned by brokers operating cyber schemes showed the first signs of a readjustment in the previous Insurance Times Schemes Index, falling year-on-year by 3.4% – equivalent to a decrease of £16,838. 

This trend has solidified and accelerated in the newest data between 1 July and 1 December 2024, with commissions earned falling by 48% year-on-year. This equalled a fall in actual commission earned of £245,642, making cyber lines the worst performing line by far.

The poor performance of cyber schemes is compounded by the period-on-period data, which showed that the second half of 2024 was 46% worse for commission earned compared with the first half of the year.

When digging further into the data, this fall in commission for brokers is shown to be reflective of major price adjustments – while premiums earned period-on-period fell by 53%, the amount of broker schemes for this line actually increased by 318 or 8%. 

Commission from cyber scheme renewals also fell by 65%, while commissions from first premiums only fell by 33%.