... but many businesses are failing to protect their future.
- Just over one 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.
- Overall outlook for 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 research1 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.
How brokers feel the current climate effects their growth
Feel the current climate has no impact on their business
Believe it is having a positive effect
Can't see any opportunities 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 broker businesses 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.
"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.”
The greatest opportunity
Sixteen per cent 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 poll found that just over four in 10 businesses plan to hire new brokers in the next 12 months, with the majority recruiting externally. Twenty-seven per cent plan to recruit graduates.
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%).
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 at no extra cost to ensure the client is well protected from the risk of underinsurance.
The Aviva research also found:
- 24% of brokers are concerned that clients who do not follow their advice could be missing out on services or products that could make their lives easier.
- Retirement (59%) is the primary reason for brokers planning to leave the industry.
- Most brokers would like to increase the amount of face-to-face time they spend with clients, reflecting the importance the industry places on personal relationships.
1 Survey carried out by FWD Research on behalf of Aviva from 1 May 2018 to 31 May 2018.
Aviva press office: Liz Opalka