Broker Barometer – The broker landscape report
New research conducted by Aviva reveals that the broker industry is set for growth, but many businesses are failing to protect their future.
The business landscape is becoming increasingly complex, with ever-evolving risks from cyber-attacks and regulatory changes. In the inaugural broker landscape report, we out to examine current market dynamics and look ahead to 2019 to support brokers in being prepared for the potential opportunities and challenges likely to arise.
What were the key findings?
- Just over 1 in 10 broker owners have a succession plan in place, according to research by Aviva
- Lack of planning highlighted as 9% of brokers expect to leave the industry within the next 12 months
- The overall outlook for the industry remains one of growth and confidence, with 42% of brokers planning to expand their business
- Interest in cyber insurance surges, as a third of brokers (34%) see an increase in enquiries
- Most pressing concern for brokers (78%) when clients don’t follow advice is that they will be left underinsured or have gaps in their cover.
- The vast majority of broker businesses are not taking steps to protect their legacy, new research* by Aviva has found. The survey reveals that only 13% of owners have a succession plan in place, while the majority of those aiming to leave over the next year do not know how they will close or sell their business.
- Despite Brexit, inflation and rising interest rates, the research also shows that the economic climate is not hampering broker growth. Just over half of brokers (51%) feel the current climate has no impact on their business, while one in five (20%) believe it is having a positive effect. However, 7% can’t see any opportunities coming their way and are worried about the next 12 months.
Phil Bayles, Managing Director of UK Intermediaries said the findings were generally cause for optimism, with many brokers confident about their ability to grow. He also stressed the importance of longer-term thinking to ensure that hard work today wasn’t lost in the future.
He said: “Succession planning is vital for any business wishing to protect its legacy, especially owners who intend to leave or retire within the next five years.
“There is a wide range of support and advice available, and brokers can always turn to their insurance partners for help. For example, Aviva offers a succession proposition that provides independent, regional brokers with access to organisations and experts who specialise in mergers and acquisitions consultancy, sourcing funding solutions, obtaining valuations and, of course, compliance.
“Meanwhile our Future Leaders programme, delivered over two years, covers the essential knowledge, skills and behaviours needed to run a successful broker business. Each participant in the programme is given access to industry expert mentors and coaches.”
Sixteen percent of brokers think the greatest opportunity over the next 12 months will be selling cyber insurance. Over one third (34%) have seen an increase in cyber enquiries – compared to more modest rises in flood (6%) and terrorism insurance (5%). One in 10 (11%) believe that providing personalised service to clients will be the greatest opportunity.
The top concern for brokers when clients do not follow their advice is that they could be left underinsured or have gaps in their cover (78%); followed by them not having the most suitable cover for their specific needs (72%).
Phil Bayles added: “Aviva’s business insurance is designed to address the risks that business owners tell us matter today: simple and straightforward cover, with no hidden caveats, with clear descriptions that fit on single page and new initiatives and technology to prevent causes of disruption – and help businesses recover when the unexpected does happen.
“One of these initiatives is our new Business Interruption calculator, which provides customers with a realistic assessment of their recovery time and overheads, to give them 100% confidence in their chances of recovery. What’s more, when brokers use the new calculator and the recommended level of cover is taken out, Aviva gives enhanced cover free of charge to ensure the client is well protected from the risk of underinsurance.”
Read the full report
For more information on the current landscape and future opportunities and challenges, read the full Broker Barometer report here.
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