Brokers’ profitability predicted to fall :: Insurance Age


Sell moreDespite the negative aspects of this report, there appears to be an air of optimism…but, in the light of some more in depth research, I wonder: “what is the basis for such optimism?

From my own experience, most of the brokers I know are so busy looking after their clients that “they can’t see the wood for the trees”! When you are stuck in such a deep, well worn, rut it is notoriously difficult to form an accurate picture of what is happening around you, let alone develop a robust strategy for the future.

My own analysis has concluded that, by pursuing (even well conceived) development strategies in the current climate, brokers can significantly damage their own profitability!

This an article from July 2011: What do you do when you are in a hole? and the following an extract from an earlier article:confused-character

"Insurers and much of the broker channel have become dependent upon the revenue from selling protection when they should be promoting loss prevention and rewarding profitability”

 

I have a genuine fear that too many good professionals lack a realistic vision of the future. The longer they remain stuck in their rut the less likely they are to retain the will, appetite and ability to adapt and survive in a changed insurance landscape.

Brokers saw a strong decline in business at the end of 2011 and face further reductions in profitability at the start of 2012 according to a new report.

The Financial Services Survey from Price Waterhouse Coopers (PwC) and the Confederation of British Industry stated that the volume of business for UK general insurance brokers fell strongly in the three months ending December 2011, and that this drop in volume led to a reduction in brokers’ profitability.

It noted that although total operating costs fell in the quarter, brokers had seen a surge in average costs per transaction.

The authors added that profitability, volumes and premium income were expected to fall again for brokers in the next quarter, although at a slower rate.

The results for brokers were at odds with the overall figures for the UK financial services sector which saw business volumes grew for the seventh quarter in a row…

via Brokers’ profitability predicted to fall Insurance Age.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s