Regulation and retention are key concerns for personal lines brokers – Ageas UK

Regulation such as Consumer Duty, “access to quality competitive capacity” and the impact of insurer pricing and underwriting on brokers’ client retention are key challenges facing personal lines brokers this year, according to Ant Middle, chief executive of Ageas UK.

Speaking exclusively to Insurance Times, Middle specifically ringfenced regulation as testing personal lines brokers, with the FCA’s Consumer Duty rules – which came into effect from July 2023 – “creating a need for a lot of focus and a lot of effort”.

Consumer Duty requires firms to measure, analyse and benchmark their performance across a number of metrics designed to bolster service.

These metrics include products and services, fair value, consumer understanding and consumer support.

While Middle acknowledged that the extra workload associated with Consumer Duty has been a frustration for insurance firms, he emphasised that the industry must view the regulation “with a glass half full” attitude.

He explained: “It’s very easy to focus on the work and the demand on resources to get through all the fair value assessments, all the things that we need to do to prove we’re getting good outcomes for customers, [however] I tend to look at it with a glass half full [perspective].

“Ultimately, the intent of the Consumer Duty regulation is to make sure we’re serving customers really well and offering them value.

“Whilst we have to do a lot of work to prove [that] value, I think it is a really positive agitation to the whole market and to our business to continually improve. The intention is the right intention. We’ve got to embrace it and work really hard with our broker partners.”

Pricing volatility

In addition to regulation, Middle cited “capacity and access to quality, competitive capacity in the personal lines market” as “a very clear issue for our broker partners”.

Furthermore, “pricing is obviously a big challenge too” – especially in terms of the impact this can have on client retention for personal lines brokers.

Middle continued: “We hate volatility – our brokers don’t like volatility either. So, us being a consistent underwriter is really important. We’ve got to work really hard to make sure we’re containing our price point.

“We’ve got to work incredibly hard [on] our claims process to contain costs and inflation. We’ve got to work on our own cost base so that we don’t have to pass that on to customers. We are [as] competitive as we can be on our price [to] offer consistency to our broker partners.

“But even with all that work, the year-on-year price increases that we are having to pass on to our customers – and brokers having to manage [those conversations] with their customers in this point in the cycle – is really difficult for them.

“Retention, [therefore], is a common theme. Making sure that we are supporting our partners to keep customers is the lifeblood of our business.”