Andrew Holt looks at research revealing a whole range of concerns from the broker community
As might be expected during such turbulent times, brokers have a lot on their minds. Namely, consolidation, costs and communication, according to a dramatically titled report Adapt Or Die by Insurecom
The report highlights the usual issues such as adapting to changing market pressures seems to be uppermost in the minds of brokers. Well over half of senior managers characterised the immediate future for the industry as a case of ‘adapt or die’. Interestingly, over half (57%) believe that the small broker no longer represents a viable business model. This is very worrying and surely too pessimistic.
As you would expect, continuing market consolidation is causing fear and expectation in equal measure among the broker fraternity.
Yet, at the same time, being undercut, or even ‘snapped up’ by ever-bigger fish poses a significant threat to the vast majority of large brokers. Over half (59%) are living in fear of takeover from major consolidating brokers, whilst an overwhelming 90% expressed concerns over competition from larger, more acquisitive rivals.
Crucially, improving eBusiness communication channels for customers would make their brokerages up to one fifth more productive (20%) – a potential productivity gain worth a staggering £1.56bn each year to an industry worth £7.8bn annually.
According to brokers, improving communication channels to the industry – for instance via access to trading portals such as imarket – would result in an additional 20% productivity uplift,.
Hardly surprisingly, brokers identified meeting FSA compliance requirements as the greatest barrier to achieving business growth, with three quarters (75%) of major brokers citing compliance as a major obstacle to growth efforts.
Consequently, major brokers believe that their firms could enhance productivity by close to a tenth (8%) on average with more efficient compliance procedures equivalent to over £0.5 billion in additional output across the industry.
In much the same way as brokers themselves, the technology at their disposal needs to evolve if it is to support brokers’ needs in the twenty first century.
