Schemes: Broker survey

According to an Insurance Times survey of more than 60 brokers, almost 50% believe the market for schemes will improve.

The survey also revealed that 34% think the market will remained unchanged, and 16% say it will decline.

The research found that the biggest challenge facing brokers in setting up a scheme was competition (38%), closely followed by cost and regulation (both 30%). The most popular scheme sector was property (34%), followed by liability (28%) and motor (19%).

Some brokers cited more than one challenge, or had formed more than one type of scheme.

Separate research carried out this year by MMA Insurance of 250 brokers revealed that the most common method used by brokers when marketing schemes to customers was to target specific sectors (61%), with 41% citing hard-copy flyers, email marketing, and working with trade associations.

The gripes relating to service issues that cause the greatest frustration for brokers when dealing with insurers was a lack of or slow responsiveness to queries and a lack of underwriting flexibility (both 29.8%).

Lack of access to decision-makers (26.7%), poor claims handling (23.7%) and difficulty in reconciling accounts (22.9%) also scored high on the scales of complaint.

Meanwhile, when it comes to selecting an insurer partner for a new scheme, most brokers said they would approach specific insurers that they have a current relationship with (36%).

MMA Insurance’s head of UK development, Peter Knowles, said: “Market experience suggests that one-third of all new schemes fail within the first three years. This is often down to a misalignment of expectations and objectives between the broker and insurer.

“This can be because the insurer loses interest with the scheme within this period, or the scheme fails to live up to its original, possibly over-optimistic, billing.”

To see the surveys in numbers, click here.