Personal lines brokers can make a come back
Personal lines Brokers are set for a come back thanks to aggregators, despite much being written about their demise over the past 10 years, says Defaqto.
Aggregators have been seen as the enemy by some brokers. However, savvy brokers can ensure a significant amount of car insurance business through aggregator’s sites.
Brokers with online capabilities to provide car insurance quotations were starting to appear on aggregator sites according to Defaqto research in October 2007. This has increased rapidly with new sites launching, and a number of broker quotations now appearing on the majority of aggregator sites.
Although in the commercial lines market, most businesses buy insurance through a broker, direct writers and bancassurers now have their eyes firmly fixed on this market, a move that is not unwelcome by customers.
Companies such as Direct Line have entered into the SME market and heavily advertise the benefits of going direct, including: ‘providing a dedicated business team in a UK call centre’, ‘cutting out the middleman’ and ‘guaranteeing to beat your renewal quote’. This will not be missed by the business consumer, meaning that brokers will have to relinquish some control of the SME market.
The broker is still king in the medium to larger sector of the commercial market. These types of businesses have varied and unique insurance requirements which may not be catered for by direct insurers, and the business consumer will still need advice from the professional broker.
Mike Powell, consultant – General Insurance at Defaqto, said: “The broker is still a major player in the insurance industry, with resurgence in the car insurance market through aggregators becoming more prominent.
“Although commercial insurance is still regarded as an intermediated form of insurance, competition in the form of direct writers is now here and likely to intensify.
"Brokers are continuing to provide their clients with the advice that is essential to protect their businesses and that they can add value to the purchase of what, for some at least, is still a complex and daunting product area”.
