Agenda: Going for growth in a tough market
There is little doubt that brokers have got it tough. The anticipated hardening of the market is a long time coming despite bold words by insurers, the economy is only recovering hesitantly with the important construction sector still in the doldrums and insurers are reluctant to increase commission as they try to reduce their overall distribution costs. Competition among brokers is fierce as businesses are more willing to obtain competitive quotes and brokers are more aggressive in marketing.
It is estimated that market premium income for commercial insurance dropped by more than 5% in 2009 with little prospect of any increase this year. The personal lines sector is more optimistic with rates hardening, but for most brokers this is only a small part of their business. This scenario puts further pressure on brokers' finances where some 85% of costs are fixed, leaving them struggling to maintain profit levels in this climate.
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