Latest broker schemes data hints at ‘slightly improved’ trading period

Schemes brokers experienced “slightly improved” trading in the latest Insurance Times Schemes Index, which covers the period between April and September 2024.

That was according to Adam Bishop, chief executive at schemes software provider SchemeServe, which provided the data for the most recent index.

The previous Insurance Times Schemes Index from May this year provided evidence that the insurance cycle may have begun to soften, with half of all schemes in the index seeing premiums and commissions earned falling.

However, the latest iteration has shown a partial recovery in total premiums earned for brokers. 

Bishop explained: ”On the platform, the overall premium increase across all schemes averaged 12% for the most recent six months versus the previous six months.

“In comparison to the same period a year ago, average premium increase was 8%. In comparison to the same period two years ago, total premium increased on average 35%.” 

As premiums earned from broker schemes have increased, commissions have followed. However, Bishop noted that the rate of increase in commissions earned has outstripped the rate of increase in premiums.

He said: ”While premiums have seen increases across the board, commissions have increased at multiples of this during the previous six month period, year-on-year and from the same period two years ago.”

Top performing schemes

In terms of commission value earned by brokers, the top performing broker scheme lines have remained the same from the previous Insurance Times Schemes Index – commercial combined policies, commercial property owners and SME package.

Year-on-year, commercial combined policies saw the largest increase in commission – both by value and percentage. Total commission earned by brokers operating this sort of scheme on SchemeServe’s platform increased by 35.7%, equivalent to a uplift of £1.16m.

Commercial property owners schemes came in at second place in the year-on-year rankings, seeing a 27.9% rise in commission that equalled an increase of £922,385.

SME package schemes also saw a similar total rise of £906,206, although this was from a larger figure and only equalled a 13.6% commission increase from the same period last year. 

When comparing this index’s period to the data from the previous six months, these three lines once again make up the medal positions.

And, in both year-on-year and previous six months comparisons, these three areas also sit in the top three positions for total premium growth, as well as growth in the number of policies being written.

Bishop added: ”In terms of commission value, the most significant increased values were achieved by these three products, which seem to jostle for podium positions in terms of commission earnings and growth over comparative periods.

”We certainly see a trend of sustained commission growth in these three products, which are consistently ahead of the pack and leaders in earnings and growth.” 

However, outside of these top spots there were other lines also seeing impressive growth in commission earned by brokers, including excess of loss liability (23.8%), motor trade (17.6%) and caravan and trailer (8%).

Cyber readjustment 

In comparison to previous index, when it say a 23% year-on-year growth in commissions earned, cyber liability schemes performed less well.

The most recent data for this type of broker scheme showed that, year on year, commissions earned have actually fallen by 3.4%, equivalent to a decrease of £16,838. 

Total premium earned for cyber liability schemes also fell by the largest percentage of any scheme type in this analysis, decreasing by 14.7% – equal to a decrease of £356,307.

However, when looking at the data compared to the previous six month period, rather than year-on-year, cyber liability tells a different story. 

Total premiums earned still fell by 5.3% in this period when compared to the previous six months, but commissions earned actually increased despite this – rising by 6% or £26,847.

More long term, premium earned in this line increased by 58%, when compared to two years ago. 

Bishop noted: “Although not near the values in real terms, the largest percentage commissions increases between the last six months and two years ago are cyber liability (94%) and specialist combined (78%).