Strength in depth

Despite these challenging times the general insurance sector has bucked the trend and seemingly survived the downturn, and the signs continue to look strong according to figures released by Imas in its latest Quarterly Review of FSA Authorisations and Cancellations.

General Insurance authorisations made up 17% of all financial services authorisations in Q2 2009 compared to 14% in Q1 2009(36 firms).

The number of new firms authorised in the general insurance industry increased by 33% in the second quarter of the year, with the regulator approving 48 new businesses for trading in the sector.

In particular, commercial lines broker start-ups are showing signs of strength, with the number of start-ups more than doubling to 21, that’s 11 more according to Q1 figures.

Personal Lines start-ups also remain steady, with 10 given the green light by the FSA in Q2, compare to nine in Q1.

The 17 remaining authorisations in Q2 included five specialist brokers, a single Lloyd's broker, one underwriter, one mutual, two actuarial, one assistance provider, five claims handling companies and one run-off provider.

Cancellations has decreased by two, with 17 in Q2 2009, compared to 19 cancellations in Q1 2009.

Senior industry figures has talked-up the rise of new-start-up brokers in the market and insurers are keen to back them. Bluefin chief executive Stuart Reid recently said in his blog that the insurance sector is seen as a safe haven in a recession. “There are still fantastic opportunities out there for the hardworking broker to start up his or her own business. After all, having a business that revolves around providing an essential service with annually renewable contracts is an enviable model in these uncertain times.”

He continued: “The industry will only survive if there are start ups. Without a regular injection of new, innovative thought – which is often driven by healthy market competition - the pool of ideas and innovation risks drying up.”