- Significantly fewer brokers feel the economic climate is having a positive impact than six months previously, according to new research1 by Aviva.
- Despite this, almost half of broker owners are planning to expand over the next 12 months.
- Compliance/regulation remains the top headache – with Brexit the second greatest concern (for over one in five brokers).
- Brokers are increasingly thinking about the future - over half of business owners now have a succession plan in place.
- Market/product diversification is seen as the greatest opportunity, followed by cyber insurance.
What the brokers said
plan to expand their business in 2019
think the economic climate is having a positive effect
plan to recruit externally
plan to grow through internal training and development
Almost half (48%) of broker owners said they were planning to expand their business in 2019, despite only 7% thinking the economic climate is having a positive effect (down 13% since May 2018). While most will recruit externally (93%), there has been a significant increase (from 36% to 53%) in the number who plan to grow through internal training and development.
Perhaps because of the current political and economic uncertainty, significantly more brokers are taking steps to secure the future of their business. The number of broker owners who have some kind of succession plan in place has more than doubled (from 25% to 56%).
Phil Bayles, Aviva’s Managing Director, Intermediaries said the findings were encouraging for the future of independent brokerages - and showed that most were feeling positive despite the challenging business environment.
Our first broker barometer survey in 2018 highlighted a lack of longer-term thinking, and I’m delighted so many brokers are starting to address this by putting a succession plan in place. Taking the time to plan for the future now will enable brokers to protect their legacy for tomorrow and beyond.
The increase in those planning to grow through internal training and development is also good news. Aviva offers all independent brokers free access to industry-leading learning and development tools through our Aviva Broker Community, helping them to develop their people as well as keep up-to-date with market and legislative changes and other essential knowledge.
The survey also showed a significant rise in the number of brokers concerned that clients may be underinsured or have gaps in their cover should they choose not to follow advice (up from 78% to 87%), suggesting that underinsurance remains an important issue for the industry to address.
Phil Bayles commented: “2019 is likely to see upheaval that could have a deep impact on businesses – from changes to their supply chain to potential tariffs and uncertain exchange rates. To help brokers navigate these waters for their clients, Aviva has produced an online guide to the questions brokers should be asking their clients to help ensure they recommend the right level of cover.”
Fewer brokers are planning to leave the industry (only 6% over the next 12 months, compared to 9% in May 2018).
Although more brokers say the current economic climate is having no impact on their business (69% in December compared to 51% in May 2018), far fewer believe it is having a positive impact (7% compared to 20%).
The majority of brokers feel they are spending the right amount of time servicing their clients, with one quarter spending too little time. Most would still like to increase the amount of face to face time they have with their clients.
Brokers feel that clients do take their advice most of the time and value it all/most of the time.
Not surprisingly, price remains by far the most common question clients asked their broker in the past 12 months, followed by quality of cover and the need for cyber insurance.
Phil Bayles added: “With risks growing ever more complex, clients need trusted advice now more than ever. This is where the role of the independent broker really comes into its own. The findings from our survey indicate that brokers are fulfilling this need, with almost all clients taking and valuing their advice. I am confident that whatever the next couple of months bring, we will see the industry continue to thrive.”
1Survey carried out by FWD Research from 22 November 2018 to 14 December 2018 by telephone among 250 nationally representative brokers.
For more information about the Aviva Broker Community visit https://broker.aviva.co.uk
Notes to editors:
- For information on how Aviva is helping our people, customers and communities impacted by COVID-19 visit: www.aviva.com/covid-19-our-response/
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