Brokers upbeat about growth, despite challenges
A host of macro-economic concerns haven't diminished British brokers’ outlook for their own business, and that of their clients, for the coming year.
Our latest Broker Barometer survey found:
- Economic uncertainty, inflation and profitability are the biggest macro-economic concerns for brokers
- 30% of brokers say the cost of living is having an impact on their business; 27% expect it to impact their business in the next three months
- 76% of brokers expect their business to grow in 2023, while 79% expect client companies to grow
- When asked specifically about underinsurance, 84% of brokers said they're concerned that some clients are underinsured
When asked about their plans for their business this year, cost cutting (33%) topped the list, followed by new marketing initiatives (31%), IT investment (31%), new product launches (24%) and external recruitment (22%).
Cost of living
One in three (30%) brokers said that the cost of living crisis is having an impact on their business, with a further 27% saying they expect the crisis to affect their business in the next three months. Brokers expect the cost of living to affect their business in a number of ways: 42% of brokers said they are having to reduce their costs, 36% said they expect less demand from clients, 33% said that as a result of the crisis, clients won’t increase their Sum Insured properly, or will fail to take out the cover that they need (33%). One-quarter (25%) said they're finding it difficult to grow their business as a result of the crisis.
Demand from clients
Brokers are seeing increased demand from clients for their guidance on a range of insurance issues, compared to 2022. For example, one in five (20%) brokers said their clients needed help working through hard market conditions – double last year’s figure of 10%. This was followed by clients seeking counsel on risk management assessments and strategies (14%; 2022: 9%), management liability (9%; 2022: 8%) and helping clients focus on the impact of climate change (8%; 2022: 10%).
Proposition enquiries
Likewise, client enquiries regarding insurance solutions are showing strong signs of growth. Enquiries about risk management have nearly doubled in the last year, with one in three brokers reporting an uptake (30%; 2022: 16%). Brokers also report strong growth in the number of cyber (28%; 2022: 16%), business interruption (24%; 2022: 16%) and property insurance (24%; 2022: 13%) enquiries.
Underinsurance
The growing threat of underinsurance remains a worry for brokers, 84% of whom said they're concerned that some of their clients may be underinsured. Brokers are looking to insurers to help them address the issue: 49% want insurers to educate their clients about the risk of underinsurance and 48% want insurers to do more to encourage brokers to review with their clients Sum Insured every year. Four out of ten brokers (40%) said they want insurers to share data to better understand which of their clients are underinsured. Similarly, 37% of brokers want insurers to use big data to help personalise the insurance offered to the client so that the insurance offered is suited to their needs.
Helping brokers with underinsurance
Our data1 shows that around 45% of brokers haven’t updated their existing clients’ property damage Sum Insured for more than four years.
We’re helping brokers identify and tackle underinsurance in business clients through the expertise of our regional underwriting teams, and the enhancement of the quote journey for Property Owners on Fast Trade. This latest digital improvement to the number-one rated platform2 brings the capability of our Commercial Intelligence Tool (CIT) into Fast Trade, so brokers can find out instantly if the client is likely to be underinsured. If this is the case, CIT will recommend Sum Insured or, where there is insufficient data to recommend a limit, the broker can offer the client a discounted desk-based e-Valuation via Barrett Corp & Harrington. We also look to waive average for a large proportion of our SME policies traded regionally – and all Property Owners’ business placed via Fast Trade.
Ryan Birbeck, Regional Brokers Director, Aviva, said;
“Brokers are once again proving themselves to be incredibly resilient and a valuable adviser for their clients. Although challenging market conditions remain, Aviva’s Broker Barometer shows an economic environment that has opportunities, with marked increases in the number of enquiries on insurance issues and solutions. This is testament to the vital expertise brokers provide to their clients.”
“Underinsurance is a significant issue for brokers, and they clearly want their insurer partners to support their efforts to help educate their clients. Aviva’s regional underwriting teams can support them by identifying those clients who are vulnerable due to underinsurance, and by making Aviva’s Commercial Insurance Tool available for brokers on Fast Trade, we hope to equip brokers with the necessary tools and information to have quality client conversations on this topic.”
“Aviva continues to invest in digital solutions, from a trading and self-service perspective. This will support broker focus on improving efficiency, a key focus that comes out of this survey. I am pleased that many aspects of Aviva’s Broker Barometer can be supported by our broker facing businesses, including offering specialist support around risk management guidance, an expanding cyber appetite, and access to a broad range of marketing tools and advice.”
View our Underinsurance hub to access support and guidance
1 Data insight sourced from Aviva’s Commercial Intelligence Tool – 13 February 2023
2 Aviva’s Fast Trade platform rated number one in the Insurance Times Etrading Report 2022